Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1922-12-26
KAHN URGES CUT
IN DEBT INTEREST
Banker Sees Lower Rate En-.
abling Allies TO Provide
Sinking Fund.
PAY OUT IN 47 YEARS
Financier Deems Loans Made
After Armistice Should
Be Paid First.
PAY OUT IN 47 YEARS
tBy Associated prc..1

new YORK. Dec. 25.--Otto Kahn.
nanker. In letter to Senator Red
S'nn"t' or Utah. member o. the Debt
Nc' uhHihg Commission, made pubic
,odas by the committee yt American
business men. has outlined plan
Whcfchy he believes Amar.ca can con-
sist' ntly aid 'oward relieving the Eu-
ropeah situation and a the same time
'Hcct the senti:nent o: The cnun,r;
which sernt- ..i',-..eI to the cane.
iap III a. ihc allied Indebtedness .o
the United States.
ai7. Kahn expressed himself as
DciitE strongly in favor OF the policy
"t Sanceiing at least portion of
inc indcb'' dncss of ne allied natio:s
Eds II Good ..,cstmcn,.
Il am convinced ,hs. II would b,
10 our ultimate advantage to do So"
ne wrp'c. Il feel sure tnat such a..
tion would turn out aood invest
meut.
..Dut Il public opinion and Congress
VIII not at present consent to the
Eclinquishmcnt on our part of a nor
ton OF the allied debit" the letter
CONTINUED. which relin1uishmcnt, be
It understood. is suggested only in
return for, and simultaneously with.
measures on the part Of the European
nations to bring about that change
OF mental and moral attitude and
actual conditions which Is indispen-
SABLE !! the world again Is TO he on
an even keel-then my suggestion
would be the following:
or tho two and thrcc-Quartcr bill
lion dollars. or thereabouts. which
cur government loaned to the allied
nations after the armisticc. that por-
ton at least as was not applied to
tfe settlement OF war contracts here.
or Is offset by valid counterclaim. is
intrins sically distinguishable from the
balance of the allied debt to us.
should De Paid Soon.
1T should be promptly put in the
way o! repayment with reasonable
rate Of interest. For instance, Amer
lea might stipulate interest at the
rate or per cent or 81 per cent and
an annual sinking fund OF per cent
BEGINNING after. say. five years. The
refunding commission ought 10 he
empowered. according to its juds-
mcnt. to postpone the beginning of
interest payment likewise for Ave
years.
"As to tho remaining s7.o5o.ooo, 900
or thereabouts. there should be no
attempt to appy the same formula
to every country. The refundinE
com mission should go thoroughly
Into the economic and financial and
general situation OF all countries
settlement subject to the approval
OF Congress.
should Reduce Interest.
Even upon Americas financially
most potent debtor. Great Britain.
she should not impose the exceed
ingly heavy burden Of paying 41-4
Per cent interest from the start
and redeeming tho principal within
twenty-five years. I would suggest
IL, h
Illustration. that there be naid An
annual sinking fund OF three quar-
ters of per cent. Such sinking
fund. IL invested at the rate of
per cent. would extinguish the debt
In forty-scvcn years. In addition
to the sinking fund OF thrce-quar-
ters of ! per cent interest should
be charged on the debt at the rate
OF say, per cent for the first period
OF eight years. 21-2 per cent for the
second. per cent for the third.
l-2 fer the fourth. for the fifth
and 4l-2 for the final scvcn-year
period.
Similar PInn for France.
"A similar formula might he ap-
plied In the case OF France. making
the sinking fund onc-haIf Of per
cent only. which. IL invested at tho
rate OF pcr cont, would extinguish
the debt in hfty-six years. and
charge purely nominal rate Of in
tercst. or perhaps no interest at all,
for the first eight-year period. The
rates of interest for further periods
may be made even more moderate
than those suggested in tho case of
England.
THE question Of the feasibility.
acceptability and extent of payment
In kind in lieu OF cash. should also
be within the purview of the COM
missions Investigations and recon-
mendations"