The Birmingham age-herald., 1923-02-04
FUNDING THE BRITISH DEBT

T pOLNO1lNO LIE bhl lIIOT1 OED
 The proposed settlement of the war in- debtedness of Great Britain, which appears to have been tentatively agreed upon by the representatives of that government and the American debt funding commission, will, according to the developments of the past few days, have anything but easy sailing before the American congress, because the debt funding commission exceeded its au- therity conferred by congress, when It ac- cepted rate of interest below the minimyn fixed by statute.
 Briefly, the proposal of the representa- lives of the British government calls for liquidation of the amount of nearly $5, ,o0o,- 900 over period of sixty-two years at an interest rate of three per cent. for the first ten years and three and one-half per cent thereafter, the amortization rate being one and one-half per cent. per annum. The statute creating the American debt comnlis- sion provides for an interest rate not lower than four and one-half per cent. and a liqui- dation of principal over period of not to exceed twenty-five years. It appears to have been generally overlooked that the action of congress in fixing the interest rate at four and one-half per cent. was because of conditions in the original authorization for the raising of the money which pre-. scribed that the money should not be loaned at lower interest rate than the interest rate the United States must pay on the bonds sold to the American public for the purpose of extending loans to Europeao ;4e loans rate of four and one-half per cent.
 The proposal of the British government which appears to have been agreed to by the American debt commission is that the org inal conditions upon which the money was raised from the American people to be loaned to Great Britain be nullified and that the act creating the debt commission be re- pealed. Even though congress should ill dicate willingness to repeal the section of the act creating the American debt commis. sion so as to provide for longer period of payment and lower interest rate, the ques- tion can well be raised whether congress has the right to make a retroactive amendment of the conditions under which the American people were asked to subscribe to the bonds.
 If the government of Great Britain pays three per cent. interest rate on money borrowed from the United States and the Uaited States government pays four and one-half per cent. on it's war issues, then there will be deficit in interest rate of from fifty to seventy-five million dollars per annum that must be absorbed by the government of the United States Tn income and profits taxes from the American citi- zen and the American business man. The net effect is that the American business man is taxed to meet the difference in the interest charge, while the business man of Great Britain is escaping that similar sum. This difference might have a distinct bear ing upon extension of foreign commerce of the United States. The American ship op- orator and the American foreign broker have their incomes taxed to meet the difference between the interest rate paid by the British government and the interest rate being paid by the United States; whereas, certainly If Great Britain paid the same interest rate to the government on the same money that the government borrowed from the American people, there would be an equality of gov ernment taxation between the two nations and no escape of similar obligation on the part of the British citizen as against the American citizen or business man.
 As Illustrating the temper of congress. there is great resistance to the merchant marine bill, now in debate in congress, be- cause it would cost the American people $50 100000 year to build an American Merchant Marine sufficient to make the United States independent of Great Britain on the seas. Yet the suggestion comes tha. our great marine rival, the British. be al lowed an interest rate on their obligations to this government that would represent larger sum, which would go to this rival of ours on the seas.
 No doubt these evidences are in the minds of those members of congress who have al- ready raised voice in objection to the sug- gested basis of settlement negotiated b- tween the authorized representatives of the two governments The tentative arrange ment has, it wouH appear, long road before the end is reached in the halls of the Ameri- can congress, and it is welcome to see that a settlement that would free the British tax payer of sum that this government would put on the shoulders of the business of the United States is to be given the light of day through full and free discussion. by members of our congress.
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 THE VETERANS BUREAU <
 There has been so much criticism of the