Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1923-02-17
DEBT settlement
TER|MSNDT TyN'|2HT
LE|V|ENT IN SENATE
BY DAVID LAWRENCE
(Leased Wire Service 10 The Jourral.)
(Copyright 1921

( Copyright, 1921
WASHINGTON, Feb. 15.-Some
curious impressions prevail on Capt.
toll Hill as to the leniency or sever
ity Il the terms of settlement of the
British war debt to the United
States.
The debate brings out the fact
that Some of the members of con-
gress think the British got off light
Iy while others more or less feel an
obligation to apologize for what
they construe to be a "hard bar
gain" The discussion has been
prompted by the desire of some
members to attach an amendment
which would prevent other coun-
tries from getting any better terms.
President Harding has let it be
known that the United States is not
bound later on to give Great Britain
any better terms even if it is found
necessary to negotiate and accept a
much easier arrangement with some
other countries indebted to America.
He regards the British debt settle
ment as a closed incident and calls
attention to the fact that no favored
nation clause was inserted in the
agreement.
| consider it within the realm OF pos
sibility that America will be moral
ly bound to justify a refusal to re-
| wise the arrangement if easier terms
are negotiated with other powers.
Senator Smoot, member of the
! American funding commission, pre-
diets publicly that the next debt
agreements will not be so good for
the United States as that negotiated
with Great Britain. In face of that
statement, the question which has
arisen is whether England will not
be tempted to revive the negotiations
of her own initiative and propose a
new agreement. The terms could
be altered by mutual consent.
May Propose Change
Some of the curbstone economists
are saying that irrespective Of
| whether Great Britain asks for a re-
vision, America may find it to her
own advantage some day to propose
a change. 1t is argued that if the
interest rate throughout the world
on government bonds should fall
below 3 per cent which is the rate
fixed for the next ten years on the
British Indebtedness to America, the
British would be able to issue new
bonds and raise enough in the open
market at say two per cent or even
| half per cent to make it worth while
paying off the first ten installments
of the war debt at once. This might
dump securities back into America
! at a time when their coming would
be least desirable and might have
an unsteady effect on Americas
trade balances and the price of the
American dollar in foreign ex-
change.
1t might develop situation like
the one which existed immediately
after the war, when the American
government was just as glad to
have England defer payment of her
| interest as England was to with
hold the same. Interest is payable
in gold and if England had drained
| her already meager gold supply to
pay America, the British pound
sterling would have been held back
| and the purchasing power of British
money in this country would have
been held down so far below che
| American dollar as to make pur
| chases unattractive and the effects
on American commerce would have
| been adverse.
There is no doubt that the pre-
| ponderant feeling in the senate is
in favor of accepting the British
| terms, but the first flush of salts
faction over the excellence of the
| terms of settlement for America is
fading and it is beginning to be
realized that some day another con.
| ference between Great Britain and
the United States may become
necessary to adjust the interest
| rates once more.
Italy and France
Meanwhile, the American govern
ment will, Of course, endeavor> to
get from Italy and France as good
| terms as possible, but there again
| the settlement will depend upon The
capacity of each country to pay. It
| has been brought out, for instance,
officially that the war debt of Great
Britain, exclusive. of course, the
debts of her dominions, but includ-
| ing Ireland and Scotland and Wales,
is approximately $4,000 100000,
while that Of the United States.
with three times the population. is
only S23,000.000 10000. Indeed. the
debt per person in the United King
dom is $822.54, as against $226.35
per person in the United States.
The British debt to America, with
interest to date, totals about four
and a half billions. Extended over
a period of 81 cents, the British will
have paid America more than twice
the original principal. The debts
owing to America from other coun-
tries to date, as officially revealed,
aggregate $3,716,514,527 owed by
France, and $1,850,313,7S2 owed by
Italy and one billion dollars owed
! by Belgium, Czecho. Slovakia. Rus
STA and other countries, the Belgian
| debt itself being about $420, 900, 900.
The general impression is that
! much better terms will be secured
from the French and Italian debt
than the Indebtedness of Belgium
and smaller countries, so that the
questions raised in congress really
depend after all on the capacity OF
the French and the Italians to LAY
their obligations. Until the Ruhr
situation clears uD. it is doubtful
whether any move will be made to
negotiate a settlement with F'rarce
or Italy.
n -. Is