Evening star., 1922-12-26


ness to tho United States.
Mr.. Kahn expressed himself as be-
ing strongly in favor of the policy Of
canceling at least portion of the
indebtedness of the allied nations.
II am convinced that it would be to
our ultimate advantage to do So" he
wrote. Il 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-
linQuishment on our part of por-
ton of the allied debt" the letter
continued, (which REIMBURSEMENT, 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 ac-
tual conditions which is indispensable
If the world again Is to be on an even
keel. then my suggestion would be
the following:
Portion for Payment.
"Of the two and three quarter billion
dollars, or thereabouts. which our gov
ernment loaned to the allied nations
after the armiStice, that portion. at
least, as was not applied to the settle
ment of war contracts here, or is Offset
by valid counterclaim, is intrinsically
distinguishable from the balance OF the
allied debt to US. 1t should be promptly
reasonate rate Of interest. For in
stance, America might stipulate inter-
est at the rate Of 3 per cent or 81 per
cent. and an annual sinking fund Of
per cent. beginig after. say. five years.
The refunding commission ought to be
empowered. according to it's Judgment.
to postpone the beginning Of interest
payment likewise for five years.
"As to the remaining seven and one
quarter billion dollars, or thereabouts.
there should be no attempt to apply
the same formula to every country. The
refunding commission should go thor
oughly into the economic and financial
and general situation of all countries
concerned and make fair and fina!
settlement. subject to the approval of
Congress.
Even upon Americas. financially
most potent debtor. Great Britain.
she should not impose the exceed
ingly heavy burden of paying AZ
per cent interest from the start and
the pTineiDa ad within
in the case of that country. as an
illustration, that there be paid an
annual sinking fund of three-quarters
Of / per cent. Such a sinking fund
If invested at the rate of per cent
seven years. In addition to the sink
ing fund of three-quarters of l per
cent interest should be charged on
the debt at the rate of say. per
cent for the first period of eight
3 per cent for the third. 81 per
cent for the fourth, per cent for
the fifth and f1c per cent for the
final seven years period.
Similar in French Case.
"a similar formula might be ap-
piled in the case Of France. making
the sinking fund one-half of 1 per
cent only. which. II invested at the
rate Of per cent would extinsuish
the debt in f1fty-six years and charge
a purely nominal rate Of interest, or
perhaps no interest at all, for the
first eight years period. The rates Of
interest for further periods might be
made even moro moderate than those
suggested in the case Of England,
'"The question Of the feasibility, &C.
ceptability and extent Of payment in
kind in lieu Of cash, should also be
within the purview OF the commits
sion's Investigations and recommen-
dations;"
United States should be officially rep
resented on the reparations commits
sion.
"Our government" he added, should
also take official part in the work of
other commissions Of a similar char
dClcis oc5lucu " oSttAo COhtIONCEbiSl
questions and aid the recuperation of
Europe"
He declared that sit has now be-
come fairly incumbent upon the
United States to indicate precisely
and Officially what are the terms, CON
ditions and limitations under which
America would be prepared to take
part in an organised and permanently
established International effort, 20 aid
the maintenance Of peaSe ana pro.
mote understanding, .{atr dealing and
good will among che 1teitaA"