The New York herald., 1922-04-11
Burden Beyond Capacity
Wonld Swamp Finance
+ and Credit Even in U. S.
BRITAIN TO PAY IN FULL
Lower Living Standard Is
Needed and Fixing of
Debts i'm Bonds.
Special Gable to THE NEW YORK HERALD.
COPYRIGHT. 1899. by THE New York HERALD.

COPYRIGHT. 1899. by THE NEW York HERALD.
New York Herald Bureau.
London, April 10.
Although Great Britain is deter
mined to pay her debts, and though
she seeks no widespread readjustment
of the amounts of German indemnities
and her own international debts, un-
less America consents to better
methods and easier payments, it will
mean the bankruptcy of the whole
world-including America. Such was
TIE opinion given to the American
Chamber of Commerce in London by
Frederick c. Goodenough, chairman
of Barclays Bank, Ltd, at luncheon
at the Hotel Cecil to-day.
Mr.. Goodenough spoke in a friendly
atmosphere, for every American doing
business abroad wants to see financial
questions settled. Most of the Lon
don representatives of important
American interests agree to the Brit
ish theses for settlement. Mr.. Good
enough's suggestion amounts to tie
reduction of indemnities within Ger
many's clear capacity to pay, devising
method of payment such as to avoid
the periodical disturbance of the en-
tire exchange and commercial mar
kets. 1t met with general approval.
He submitted figures showing that the
total Of debts and indemnities, excluding
fsussia. is equal to two-thrds of all the
worlds export and import trade in 1913
He pointed out that these obligations
must be paid from the profits--not from
the total volume of trade. He said that
rny nation forced to bear a burden
beyond its capacity would impose a
strain upon credit which would result
in Collapse like that of Russia.
He concluded his remarks with the
outline of a plan like that proposed by
Sir Robert S. Horne, Chancellor of the
Exchequcr. whereby the American Gov
ernment would accept German or other
bonds indorsed by the British or the
French Government. secured by definite
political agreements as to sinking funds
and guarantees. Such bonds, he as
serted. would find a ready market
throughout the world. and enter ordi-
nary commercial channels without the
disturbing effect OF the present system
OF direct payments by one Government
10 another.
Z. 8. Will Decide for Herself.
Mr.. Goodenoughs remarks, which
were greeted with much applause, fol-
low:
II shall put forward some general
facts and conclusions, but nc definite
scheme on which to base a modification
of the payments to which each country
Is now committed. because feel the
United States wishes to think out the
problem for herself and to come to her
own decision upon the part she as cred
'tor will take, which she has a perfect
right to do.
ran increase of debts over those
before the war without a pre-war cor
responding increase in capital values
means that interest and amortization
can only be provided by vastly greater
efforts at production or by lowering
the standard of living, varying in eaci,
country according to the proportion OF
It's debt to it's population and resources.
arising from the war should be redis.
tributed over the whole world or even
those countries Immediately concerned
lin the war with n view of equalizing the
burden. 1t would involve injustice an1
weaken the sense of individual respon-
sibilty and moral obligation. 1t would.
moreover tend to make the consequences
OF war less deterring in the future.
On the other hand. apart from the
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tates that the burden imposed through
war debts on any particular people.
even those who may have committed
the greatest wrong. shall not be greater
than they are able to bear or reduce
them to too low standard of living.
u would be OF no advantage to the
world as a whole for very low living
standard to exist In any country, par
ticularly II X possessed few natural re-
sources and was therefore dependent on
it's industry and exports TO provide the
noccssaries of life and the payments OF
its obligations.
Gives Lead In Competition.
"A condition of low wages. provided
there was no corresponding reduction I'm
efficiency. might give a country not only
incentive but ability to compete unduIy
with the rest OF the world. Ii might
divert the trade and sap the industrial
vitality OF a richer country in favor OF
the poor. Markets thus gained Inevitably
by the payment of large indemnity or
great debt might be retained after pay
ncnt IL made which would mean a more
or less permanent loss to the recipients
of the payments and other exporting
countries. There is q limit to which
the standard OF living can be reduced
and country which carries burden
of debt In excess OF its capacity will be-
unable to make revenue and expenditure
meet with forced borrowing and de-
valuation Of currency leading eventually
10 ruin and bankruptcy. Such con-
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