Norwich bulletin., 1922-12-26
Approval of Congress.

New York, Dec 25-otto H. Kahn, banker, in letter to Senator Reed Shoot, of Utah. member of the debt re- funding commission, made public today by the committee Of American business men, has outlined a plan whereby he believes America can consistently aid toward relieving the European situation and at the same time meet the sentiment of the country which seems opposed to the cancellation of the allied indebted ness to the United States
 MT. Kahn expressed himself as being strongly in faNOr of the policy of can } ceiling at least partion of the in debtedness of the allied nations.
 q am convinced that 1t would be to tour ultimate advantage to do so," he wrote T feel sure that such action would turn out a good investment.
 But if public opinion and congress will not at present consent to the re- 1inQuishment on our part of portion of the allied debt" the letter continued, (which reIinquishment, be it und0rstood, ls suggested only in return for, and sim ultaneously with, measures on the part of the European nations to bring about { that change of mental and moral atti- tude and actual conditions which is in dispensable if the world again is to be on an even keel-then my suggestion would De the
 "Of the two and three-quarter billion dollars, or thereabouts, which our gov ,aFnment loaned to the allied nations aft CT the armistice, that portion, at least, as was not applied to the settlement of war contracts here, or is offset by valid counter claim, is intrinsically distin- Euishable from the balance of the allied debt to us. It should be promptly put in the way of repayment with a reason able rate of interest. For instance, America might stipulate interest at the rate of per cent. or sk per cent and an annual sinking fund of l per cent, beginning after, say, five years. The re- funding commission ought to be empow- cred, according to it's judgment, to post pone the beginning of interest payment likewise for five years.
 z a-As to the remaining 7A billion dol lars, or thereabeuts there should be no attempt to apply the same formula to every country. The refunding commis- sion should go thoroughly into the econ omic and financial and general ~situatlon of all countries concerned and make a fat and final settlement, subject to the approval of congress.
 aEven upon Americas financially most potent debtor, Great Britain, she should not impose the exceedingly heavy bur den of paying fA yer cent interest from the start and redeetning the principal within twenty-five years. I would sug- gest in the case of that country as an illustration, that there be paid an annual sinking fund of three-quarters of one per cent. Such sinking fund, if in- vested at the rate of four per cent, would extinguish the debt in forty-sever years In addition to the sinking funt of three-quarters of one per cent, in terest should be charged on the debt al the rate of say, per cent for the firs period of eight years, 2h per cent. fol the second, 3 per cent for the third sh per cent for the fourth, four pel rent, for the fifth and 4h per cent. fol the final seven years period.
 "A similar formula might be applied in the case of France, making the sink ing fund one-half of one per cent. only which, 1T invested at the rate of pei cent. would extinguish the debt in fifty six years, and charge a purely nomina rate of interest, or perhaps no interes at all, for the first eight years period | The rates of interest for further period 4 might be made even more moderate thai those suggegted in the case of England '-The question of the feasibility, ac ceptability and extent of payment :; kind in lieu of cash, should also b within the purview of the commission investigations and recommendations"
 MT. Kahn wrote he believed the Unit ed Sta should be officially represent ed on the reparations commission.
 ""our government he added, "shoul Ialso take official part in the work c other commissions of similar charact CT, destined to settle controversial ques l tions and aid the recuperation c Europe"
 He declared that "it has now becom fairly encumbent upon the United State to indicate precisely and officially, whs are the terms, conditions and limitation under )iich America would be prepare to take part in an organized and pel
 manentE established international eff fort. to aid the maintenance of peac
 and prlnote understanding, fair dea
 ing and good will among the nations"