The New York herald., 1922-08-02
Continued from First Page.

recognize their obligations and are
prepared to fulfill them. but evidently
they cannot do so without profoundly
modifying the course they would have
wished to pursue"
Stating that the Government does not
conceal the fact that It abandons the
policy of general cancellation of indebt-
edness with the greatest reluctance. the
note explains that the British Treasury
would be a large gamer IL all debts
were paid. because Great Britain Is
owed more than she owes.
But can the present world situation,
the note continues. "be looked at only
from this narrow financial standpoint
Regrets Commercial Aspect.
The note then proceeds to argue that
the allied and associated Powers We're
partners In the greatest international
effort ever made in the cause of free
dom and that they are still partners in
dealing with some, at least, of its re-
suits.
TO generous minds" says the note.
'it can never be agreeable, although for
reasons of state 1t may perhaps be
necessary, to regard the monetary as
pect of this great event as a thing apart,
to be torn from its historical setting
and be treated as no more than an ordi-
nary commercial dealing between trad
ers who borrow and capitalists who
lend"
Then. referring to the economic ills
from which the world is suffering, in
Guiding the weight of international in
debtedness. with all its unhappy effects
upon credit and exchange" the note
asks:
How can normality be reached while
conditions so abnormal are permitted to
prevail. and how can these conditions
be cured by any remedies that seem at
present likely to be applied?
An Unjust Partnership.
Arguing that the policy Great Britain
hitherto has pursued in refusing to make
demands upon its debtors "is only toler->
able so long as IL Is generally accepted,
the note continues that it cannot be
right that one partner in common en-
terprise should recover all she has lent
and that another while recovering moth
ing should be required to pay all she
has borrowed"
"Such procedure says the note, lis
contrary to every principle of natural
justice and cannot be expected to COM
try They are suffering from an un-
paralleled burden of taxation, from an
immense diminution in national
wealth, from serious unemployment
and from a severe curtallment in use
full expenditure
"These evils are courageously borne,
but were they to be increased by an
arrangement, which. however legitimate
is obviously one sided. the British tax
payer would inevitably ask why he
should be singled out to bear a burden
which others are bound TO share. 10
such a question there can be but one
answer"
The note, which was addressed by
the Earl of Balfour Acting Foreign
Secretary, to France Italy, Jugo o1Slavia
Rumania. Portugal and Greece, consti-
tutes a strong plea for international
settlement OF debts and reparations on
the basis of a general cancellation or
interallied Indebtedness and generous
reduction in German reparations. and
at the same time Is the Government
reply to those persons of the public and
the newspapers which have frankly ad-
vised cancellation of the French. Italian
and other allied debts to England. ire
spective of whether or not the United
States was willing to cancel the British
debt.
The British Government. says the
note. cannot treat the repayment OF the
Anglo-American loan as IL it were an
isolated incident in which only the
United States and Great Britain had
any concern. This transaction Is but
one of connected series in which Great
Britain appears sometimes as debtor
and sometimes as a creditor. If. it says.
Great Britain's undoubted obligations
as a debtor are to be enforced. her not
less undoubted rights as creditor can
not be left wholly in allegiance.
Declaring 1t is regretfuliy constrained
to request the French Government to
make arrangements for dealing to the
best of its ability with the Anglo