Newark leader. ([Newark, Ohio]) 1917-1946, 1923-02-16
THE BRITISH DEBT AND
IMPERIALISM

The funding of the British debt was
maneuver in the contest for world
financial supremacy now on between
the United States and England. The
two countries are the chief antagon-
lists in the field and the meetings of
the debt funding commissions were a
yelled part of this fundamental con-
flict.
AS established in the settlement
just accepted bv England, that coun-
try will pay the United States ap-
proximately $161 100000 a year for
10 years and $175,000,000 year for
the followino 81 years. The first
payment will include $128,O0O,OOO in
terest and 23,000,000 principal. AS
the principal is reduced the interest
payments will decline and the pay
ments of princinal will increase. In
the course of 62 years England would
thus pay the United States over $10,-
G00,000,000.
The original debt funding law, en-
acted by congress, requires that each
debtor country shall liquidate it's OBJ
legations to the United States in Is
years at the rate of Az % interest.
On these terms, annual payments, in
cluding retirement of principal,
would amount to approximately
$300,000,000. The difference between
this figure and annual payment in
terms of the proposed funding plan
would amount to slightly over 81 ner
person of our population. Gain
through strict enforcement of the in
terest rate established by the act
would amount to far less than 81 ner
capita.
From the standpoint of money in
the wage earner's pocket there is lit
tie choice between the various sug-
gested plans for funding the British
debt. Proposals involving higher in
terest rates, whether specifying quick
repayment or not, would have had
that result. 1t is believed that with
in less than 10 years Enoland will be
able to borrow money more advanta-
geously than under the terms of the
present settlement, contingent, of
course, upon continuance OF peace. In
that case she would issue her own
bonds at 3fo and renay the United
States with the proceeds.
The shorter the oeriod of time in
which repayment of the debt is ac-
complished, the greater will be the
dislocation of our domestic business.
Payments will be made, in the last
analysis, in goods produced by other
countries. Huge annual installments
would force many of our industries
to shut down, the only alternative be-
ing a sudden readjustment to produc-
ino eXportable commodities for which
we have no market.
Those concerned in the negotia-
tions were not concerned with the
standard of living of the working
class in either country. Any reduc-
ton in the cost of living through the
transfer of interest charges from one
nation to the other would eventually
result in corresponding reductions in
wage rates. That seems to be the
law of international competition. Re-
payment of the loan will mean higher
labor costs in England and lower
costs in the United States. That is
all that interested the financiers who
decided the matter, insofar as the
workers were considered at all.
The indirect effect of this repay
ment of national debts will be of far
greater Importance to labor. Any
program which involves payment will
have the following tendencies: (D 1t
will stimulate the trade of our chief
rival by forcing her to ship goods to
create credits with which to pay; (2)
it will bring to our shores an increas-
ing quantity of foreign goods to COM
pete with our domestic products in
our own markets, and (3) it will set
free more money in this country for
investment purposes, for the money
will be translated into the purchase
of government obligations for retire.
ment.
There is no question but that the
greater part of this money will be
invested overseas in so-called unde-
veloped countries. This means that
it will be spent in this country for
and materials to be used
in building up modern industry in
lands recently opened up to foreign
investment. This will create employ
ment in this country to balance the
unemployment which will result from
the unfavorable connection to which
our consumers goods are subjected.
In short it will result in shifting our
whole productive system from produc-
ing the goods which We consume to
producing capital. AS the country
proceeds in this direction the wage
Garner will find his insecurity and
consequent dependence steadily in
creasing.