The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-03-04
Refanding cur Loans to Foreign
Governments.

edness to the United States will be
a live issue for many years to
come, the National Bank OF Com
naerce in New York believes. Be-
cause of the present Worldwide
| business depression, the. confusion
in international trade. and the fin
ancial difficulties of number Of
the nations Of Europe. refunding
legislation does not settle the large
question Of international obliga-
tions. the bank says in the March
I mum Der of its magazine, Commerce
Monthly.
Foreign governments owe the
United States approximately Sill
900, ,00o. 900. largely payable on de-
7nand." it adds. s'On February 9
the president signed bill creating
| a commission to arrange the re-
funding of these obligations. The
commission is specifically empower
ed within three years TO refund
and extend the time Of payment of
1.-THE principal Or the interest Of any
obligations Of any foreign govern
nlent arising out of the world war
now held or hereafter acquired by,
the United States The converted
obligations may not have : a masur-
ity beyond June Is, 1947, or an
interest rate of less than Ia per
cent. Authority to cancel any part
| Of the Indebtedness or to substitute
the obligations OF one coVntry for
another is specifically withheld
! from the commission by the terms
OF tbs act.
1t seems reasonable to predict
that the commission will extend as
lenient terms to our former allies
In the matter OF refunding these
debts as are possible under the.
/ terms of the present legislation. an
! the country at large there are two
,weH-defned opinions as to the ques-
ton OF ultimate paynent--one for,
and one against fun cancellation OF
the debts.
| The case for cancellation %as
well stated in a recent address by
Mr. Justice Clarke of the United
States Supreme Court. The argu-
ments run that for three years the
allies fought the central powers
! without our assistance. Our ad-
vances went to further The. COM
! mon victory and We're. nothing less
than our share in the, war, So that
! in equity there really is nothing
| owing us.
| But assuming that the allies
| can .pay-so runs the argument
| may it not be q question whether
it is to our best interest that they
do SO? 1t is not necessary to dem
onstrate that our debtors must meet
both the yearly interest payn,ears
| ard amortizations chiefly by send
ing northumberland goods
into this country. The annual in
terest alone or. our foreign credits
at 4 IA per cent. comes to a. round
half billion dollars. Our favorable
trade balance OF last year was about
| $1,000, 900 600 If our allies are
able 10 meet their interest ebliga-
tons, our trade balance will prob
ably show a rapid readjustment
during the next few years. The bal
anee may shift to a so-called un-
favorable one. with imports, exceed
ing exports conceivably by as much
]; as half billion dollars. Such a
! sudden readjustment. such an in
fiux Of manufactured goods from
/ abroad. would possibly entail Sc
/; rions consequences, prolonging for
a long period unsatisfactory busi-
ness conditions. If, however, our
investors should purchase foreign
] securities on large scale, read
I justment may be partially arrested
Such are the main points Of this
phase. of the case. =
j "One OF the most forceful Of the
arguments 5cf the pronunciation
forceslis only incidentally moral or
economic. They hc.d that if we
press for the collection Of these
advances. we shall in the years to
come gain the reputation Of being
the ShYlock OF international fin
ance. They point to history TO
demonstrate that the repayment of
hinge international debts, whether
tribute or borrowings, usually
breeds a spirit of mutual distrust.
suspicion and ultimate hatred be-
| tween the parties involved. And
they raise the question whether for
a nation with a large foreign trade,
the. possibility Of such an outcome
is worth the candle.
Those who wish to see our loans
collected in. fun present counter
arguments. They hold that the
| war was primarily the war of Eu-
rope, .precipitated by European i'm
peria ism, 70 which her opponents
| contributed as we'll as Germany.
Our sole interest was TO insure the
defeat Of Germany SO that in fu-
sure years we should not have to
| oppose her alone We asked no
/! assistance in maintaining our
| armies in the line; the funds bor-
| roWed from US by our allies to
maintain their armies are their just
AID due Obligations; and they
! should expect to repay them. The
cancellation Of international obliga-
| tons is a dangerous precedent to
| establish. Furthermore. the spoiIs
| of war in the shape Of land ac-
/: QUESTION ard reparations in kind
| and money have gone entirely to
others; we asked nothing in this
! connection.