The Washington herald., 1922-03-03
Refunding the Allied Debts.

allies to this country is of the most in
terestng OF current topics-and, perhaps,
one of the most important. 1t is before the public
before the world-more prominently than
now, on account OF the debtrefunding bill passed
by Congress and the appointment of a commission
to handle the matter by the President The total
debt is in the neighborhood of SII ooooooooo.
The principal features of the bill passed by Con-
gress are that the obligations must mature in not
more than twenty-five years and that the interest
rate must be not less than "A per cent.
President Harding has certainly appointed
extraordinarily able commission to handle this debt
question. 1t needed strong commission. There
are some intricate angles and difficult prob
lens in the matter. Difficulties of business nature
in connection with the debt very considerable,
possibly too considerable; and there difficulties
which may be classed of moral sort, also.
1t is we'll known that there are good many
Americans who sincerely believe that these
debts should be cancelled entirely. Students of
economics and finance very heavily inclined to
this view, many practical bankers and busi-
ness men. In this group as we'll are those who be-
Eeve that the CREDITS extended were part of Amer
icas war contribution, nothing more. Among re-,
cent prominent advocates of cancellation may be
mentioned Otto H. Kahn, the banker; Profess
Irving Fisher, of Yale, the great economist and
John Moody, of New York, president of Moody's
Investment Service.
The arguments IN faVOr OF cancellation are not
complicated. The argument of those who believe
the credits should be regarded contrbu-
ton is very simple They say that when
America entered the war, it became
much as the war of the other nations. Such being
true, it duty, our desire and our privilege
to contribute to the common victory whatever
could contributey-to the utmost of capacity.
We able to contribute most readily most
tensively, most quickly, supplies of all sorts. These
A.
Credits to allies. We did not send gold or
money out of the country; we entered a credit in
favor of allies on books and this credit,
through their purchasing agents, they converted
into supplies with which to help win the
their war and our war. Those making this argu-
ment say that this was clearly a contribution
that should have been entered as loan at
all. They point to precedents in other In
several wars against France, Britain made money
advances to her Continental allies and asked
or expected to be repaid. Carrying the argument
further, they say that if America had been able to
send over, Immediately upon her entrance in the
war, armies which would have used the supplies
instead Of having them used by armies fighting in
the same cause should have had debt claim
at Si-snd, m addition should have borne the
casualties incident to such arrangement.
But the business men, bankers and economists
are 5nclined to pass the moral sentimental
A.
(2) We cannot afford to receive This debt say
these folks, be paid only in gold goods.
America has practically all the gold of the
world which, as a practical matter, can be OBJ
tanned A little more we might get, and that little
more would not be to advantage. 1t would
not hurt directly, by reposing in vaults
heres 1t would hurt US indirectly by further de-
uaoralizing European finance, economics industry,
. and we now know that such is harmful to US. Ac-
cordingly, payment in gold may be ruled out of
the question. Payment in goods under pres
ent industrial organization, would be prodigious
catastrophe, assuming it could be done America is
not socially and industrially organized for an "un-
favorable" balance of trade. Our present business
depression, while We still exporting vastly
more than we import indicates how much greater
our unemployment would be if imported vastly
more than we exported. If our allies were to pay
their debts in goods it is argued, according the
refandng bill, they would pay on the principal
S44ooooooo year (if the arrangement should be
that they paid one-twenty-ffth a year), and in in
terest, sum beginning with $467,5oo.noo year and
declining the principal reduced. What
would become of American industry, they ask, if
these colossal shipments OF goods were dumped
upon us? They say, further, that, a practical
matter America confesses her unwillingness to re-
ceive goods by maintaining a tariff which makes
the. receipt of such balapce in goods, through
ordinary business channels, impossible.
Zone matter which all creditors find important
in the collection of debt is the acknowledgment
by the person against whom the claim is made that
the debt really exists In this case the fact cannot
be overlooked that these debts arc not gen.
orally and sincerely admitted to be valid obliga-
tions by the peoples of the countries to whom the
credits were extended Prominent among those
individuals who have voiced the conviction that
these financial advances were contributions is
NM Louis Loucheur, of France. NJ. Loucheur is
no irresponsible ignorant extremist. He is one OF
thcs ablest men in France With DR.. RatheDeu he