The New York herald., 1922-08-07
HARDING MAY BACK
BORAH'S DEBT PLAN
Disarmament Note Expected to
Follow England's Latest
Proposal.
Special Dispatch to THE New YORK HrRALD.
New York Mernld Bureau.

Special. Dispatch to THE New YORK HnRALD.
New York NsrnId Bureau.
Washington. ID. c.. Aug. 9.
Whatever differences of viewpoint may
exist between Great Britain and the
United States as to the feasibility and
practicabil.ty Of cancellation of debts.
the two countries are very close together
In the matter of general and underlying
views as to European reconstruction and
stability.
This Government I. 4 indicated. sees
nothing but merit in the suggestion OF
Great Britain that the European nations
should cease heavy expenditures on
arinaments IL they are'to expect credit
and demand indefinite postponement OF
the payment OF debts long due. There is
q similar endorsement in Washington OF
the British position that a scaling down
Of German reparations Is a sine quo non
Of financial adjustment In Europe.
Officials of the Harding Administra-
tion have all along contended that finan-
cial disorder in Europe would continue
until German reparations were put on
basis that would be within the practical
paying power Of the German people
until budgets were balanced all around
and until the debtor and semi-bankrupt
nations ceased their expenditures on
armaments.
These axioms in the American outlook
on the situation are now repeated by
authoritative spokesmen to show that
the American debt is not a factor in the
European chaos and that any maneuvers
intended to put the onus on, the United
States are beside the point.
Inasmuch as this country Is not de-
manding immediate payment either In
principal or interest 1t would not help
the debtor nation to any general extent
TO cancel IT now. 1t is pointed out. II
would not increase their credit ma
terially. for the year to- year income IA
sight is pledged to expenditures before
1t is collected. the major part Of 1t going
for armaments.
Because OF this generally accepted
view the Harding Administration will
probably reecho the recent statement
made by Senator Borah (Rep., Idaho)
to the effect that any suggestion for
cancellation or reduction OF the debt
should be accompanied by far reaching
economies in the military and naval
establishments OF the European Powers.
The Administration is receiving re-
ports on the actual conditions In Europe
from the State Department representa-
tives home on leave. A whole mass OF
information bearing on the financial
QueSliOn Will NC 6dlhciNo W thS <hitfSi
ican Debt Commission.
Until this examination Is made and
some agreement as to funding reached
with the Powers. there is no likelihood
that this country will be willing to
broach the question of reduction of the
principal OF the debt. 1t ds conceded
that this may well be matter for
serious consideration in the future, but
IL 1t ever is considered It Is predicted
that Senator Borah's suggestion will
weigh heavily in the Administrations
councils.
Like Senator Borah, the Administra-
ton does feel to a certain extent at
least that the delay by the Powers in
acting on the Washington treaties has
had an unfavorable effect on the inn
petus given the movement for reduction
OF armaments at the Washington con-
ference. This delay has intensified the
unwiliingness of the United States to
take part In conferences for the finan-
cial reconstruction of Europe.