Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-12-19
i. s. FORMULATING
PLAN FOR REDUCING
TEUTON INDEMNITY
BY DAVID LAWRENCE
Qeased Wire Service to The Journal.)
downright 1920

"a may D6 Wiling 10 lOTeSO the IN
Ferest on the war debts of those
countries in Europe which are I'm
able to pay, for everal years to come
The principal will not be cancelled
or reduced
This contribution to the stabiliza
ton of the worlds financial crisis is
under consideration, but it will be
done only if European governments
pursue a policy which this govern
ment believes will accomplish the
desired REIMBURSEMENT in Europe. The
steps in the order in which they
should be taken are these:
First, all the powers should reach
at once a definite agreement as to
! the amount of reparations Germany
should pay annually.
Americas economic experts be-
lieve 100000 900 is the limit of
Germany's ability, and that approx
mately twelve billion is the total
sum that Germany can and should
be made to pay. France should be
l. willing to agree to renounce her
claim to any sum above that.
Second, once the PREPARATION sum
is fixed, the world will be ready to
consider an international loan such
as was proposed by the international
bankers committee a year ago which
J. p. Morgan and other financierS at
tended. This loan would not neces-
sarily require the guarantee OF gov
ernments but would need the assent
of the allied powers to regard 1t as
a prior lien on Germany'S assets.
Would Assist Germany
Third, such a loan would assist
Germany in the purchase OF 1000
stuffs, and would tend to raise the
value of the German mark and thus
keep German capital in Germany
for self.development instead OF out
side Germany in the investment mar
kets of the world.
The United States would not sub
scribe to the loan, but the Amerl'
can investor would have the same
opportunity to buy the reparation
bonds at a good rate of interest as
he has today to buy other foreign
securities.
The value of such a loan, however,
would be enhanced through the
moral support of America and, par
+ ticularly through such contribution
as the United States may make to
the easing of Europe's burdens
through the postponement or can
! collation. Of interest on the allied
. Yer debt.
Fourth, cancellation of the inter
est would never be proposed with
4 out something in return, namely as
surances that Europe would make a
real effort to pay the principal Of
the .en-billion-Gcilar war debt. and
| the only assurance which would be
| convincing here would be a reduc
ton Of land armament.
The American government cannot
ignore the fact that there are from
| three to four million men under
lrms on the continent of Europe,
and that 95 per cent are troops of
/ the allied powers. Reduction of land
armament means more money avail
able for productive purposes and
more for the meeting of payments
'sn the principal of the war debt.
AS for cancellation of the pr:nci
pal, no doubt exists here that a
4 Steady propa garda has been conduct
ID by Europeans to impress Amer
ca with the need for renting the
lllied war debt as a means of adj
justing the reparatlons problem.
But the matter of reparat ons and
4 the war debt of the allies are TO be
treated separately, am the Ameri-
ran government hopes that Europe
+ Is by this time rid of the illusion of
cancellation.
American sentiment. it is point.
ed out by officials, would not per-
nit it, and the most that can be
F. foreseen is a willingness on the part
of the people to continue to forego
the intel est as they have been do.
ing since the armistice.
Some of the nations of Europe
one or two of the smaller ones par
tlcularly, can in a few years begin
. paying their interest and the prin-
cipal.
Some. however, can not. No gen.
eral rule can be established for all
1 as local situations in each country
wary. 1t may be wise to forego the
interest in some cases altogether. In
. others it. may be necessary to can
4 Gel the interest for five and ten years
possibly some of the interest al.
ready accumulated since 1918-and
start with clean slate of annual
payment meetings of a definite date.
i say 1870 or 1880.
Although this does not mean can
collation. of the payment it does in
/ practical effect reduce the financial
burden of the allied powers by cut
ting down the sums they would
otherwise have to pay the United
States. The United States would be
giving up about $500, 00O.O 900 an.
. nually and for this sacrifice dis.
armament, undoubtedly, would be de,
manded. In support of the plan to
cancel the interest, however, the ar
gument is made that the United
States stands no chance of collect.
ing SIC, 100000, 900 plus an annual in
terest charge of $500, 1000, 900 anyhow
and that much more good will and
economic stimulus could be acfliev-
ed by recognizing that fact in
broad generous way than by holding
it over the heads of European gov
ernments indefinitely.
Another thought in the same con.
nection is that America, can not af-
ford to be placed before posterity in
the light of money lender who
exacted interest which in itself would
amount in time to the total sum
originally advanced. If the United
States got back it's ten billion it
would be getting more than many
economists have figured was pos.
sible.
But before any readjustment can
be made, Europe must understand
that,the United States does not mean
to be drawn into any 1ntrigues for
the acquisition of territory or the
constant harassing of Germany The
apparent readiness of France to re-
cede from her threat to invade the
Ruhr valley is unquestionably an in
direct result of the making known
through diplomatic channels abroad
of the American attitude