The New York herald., 1922-08-04
u. S. TO IGNORE NOTE
AND FUND WAR DEBT
Treasury and Loan Commits
sion to Continue Under Man
date of Congress.
POLICIES ARE UNCHANGED
BOrah Holds Cancellation
Means Aid to Huge European
Military Forces.
Special Dispatch to TIE NEW YoRK HERALD
New York Herald Bureau,
Washington, ID. c.. Aug. 3.

Special Dispatch to TIE NEW YoRK HERALD,
New York Herald Bureau,
Washington ID. c.. Aug. 3.
Spokesman for the policy that the
United States Government will pursue
the sl1 900. 100000 obligation due this
country on account of the war loans
to the allied Powers to-day categori-
cally declared that the Balfour note
suggesting all round cancellation would
not affect the determination Of this
country to proceed with the refunding
OF the debt with view to collection.
1t was stated, on behalf Of Secretary
of the Treasury Mellon and also on
behalf of the Funding Commission, that
this country must proceed with fund
ing operations in accord with the man
date of Congress and irrespective of
the British suggestion for cancellation.
Senator Borah (Rep., Idaho) issued
statement, in which he declared that
nothing was said in connection with
cancellation regarding the huge mill
draining the resources of the Euro
pean treasures.
Cancellation. he said. could only be
justified IN the interests of humanity.
and IL considered should be part and
parcel of a far reaching scheme for dis
armament by land and sea. The Idaho
Senator called attention to the failure
Of the Powers TO act on the Washington
treaties, adding that the impetus given
disarmament had all but died out be-
cause OF general Indifference. He quoted
Premier Lloyd George TO show that
| European Powers were nursing the war
spirit by large expenditures on arma-
ments.
U. $. TO Make No Formal Reply.
AS the British note to the Powers was
not formally addressed TO the United
States, there will be no formal reply
from this Government. The answer OF
the Treasury and OF the Funding Com
mission was In the form of declara-
ton that the policy OF the United States
toward foreign debtor nations remains
unchanged.
In connection with the British sug-
gestion, which was very plainly in
tended for American consumption. Il
was stated officially that Great Britain
had repeatedly acknowledged fer debt
to America as an independent obliga-
ton, which she would meet, and that
this country was officially informed OF
the coming Of British funding COM
mission.
AS affecting the whole attitude of the
limited states toward the abstract ques-
ton of cancellation. IL was pointed out
by the Treasury officials that the United
States occupies a unique position In the
fact that she Is only a creditor while
the rest of the nations, with perhaps the
exception of Great Britain, are debtors
and creditors Mt the same time. These
latter would not suffer from mutual can
collation., as II would wipe the slate clean
with little to lose, while the United
States would be receiving no immediate
compensation for relinqulshing her for
eign debt.
Great Britain would superhcially be
giving up claims to large amount of
money. on the other hand. these
claims are largely In the non-collectible
class. while the claims of the United
States are. to some degree at least, coli
lectible. American officials realize only
too we'll that the United States Is never
likely to collect $1,000. 100000. There
Is every reason TO believe that assurance
OF the ultimate collection of six billions
OF 1t would be gratifying TO officials.
Matter Up TO Congress.
It was indicated at the Treasury that
II this Government should ever consider
the question OF cancellation formally u
would do so on the basis Of proportion
ate reductions which would leave good
part of the debt stlll outstanding. This,
however, II was stated would be matter
for Congress to act on.
In his statement declaring that cancel
alton would only ipd any basis for JUS
tifcatfon II accompanied by a measure
for European land and sea disa rmarnent
on large scale, sonator~Borah said IN
part
sThere IA one thing In all this dis
cugsion from abroad relative 10 cancel
ing the foreign debt which vs. never men
toned II is wholly ignored In the let
ter BY the British Government, adiressed
to France but intended for the United
states. and that ls the subject OF disarm-
ament. The people of the United States
could never be greatly Interested In any
proposition for the cancellation OF any
part OF the debt TO tho United Statef
unless the proposition Is accompanied
by a definite and specific plan supported
by certain guarantees for practical DIS
armament both by land and by sea.
"There IL nothing to be gained by
our canceling this debt or any part OF
Il II the gigantic military and armament
programs in Europe are to continue. IL
would amount in practical effect 10 our
aiding and abctting tho building up OF
these great military and armament
establishments, and thereby abettng
war III cancellation Is 70 be considered
nj all II should be considered In tho In
tcrest Of humanity. or economic sanity,
and not to enable these countries to
build up and maintain these military
establishments, these great armies.
which are now burdening and torturirfg
and threatening Europe and which win
Continued on Page Two.
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