Perth Amboy evening news., 1923-03-12

WASHINGTON, d. c., March p
Tn +he settlement of the British debt
to the United States, it is agreed that
increasingly large annual payments
shall be made. The theory on which
this system OF payment has been
worked out is of special interest. ..
The British Government, ike all
| other war Governments, built up a
tremendous war machine at high
! cost. Since the war this has been IN
process of dismantling. the same
| has been true of our W Govern
| ment, Therefore, British Govern
ment expenses will be on a steadily
| declining scale. Assume now a gwen
tax rate, fixed TO raise the revenue
which Great Britain has needed to
maintain her great establishment:
! Further. consider that n industrial
nation automatically increases each
year in productiveness and wealth..
| Wherefore, if the tax rate be mann
| tanned or even reduced a little, the
rising increment of industry will
| Weld greater and greater revenues,
and we have a declining line repre-
senting Government expenses and a
| rising line representing Government
| revenues. Between them is an ever
! widening margin. From this margin,
then, will come the annually enlarg-
ing payments with which the Amer
lean debt will be amortized.
It is expected that British produc-
t~iveness and wealth will increase
with sufficient rapidly to permit of
the paying off of the debt in much
less than the 81 years provided in
the agreement. Indeed, it seems fair
ly certain that, with peace, the debt
can be paid in half that time; with
war, there would be grave question if
Great Britain on any other European
debtor could pay at all.
The action of Great Britain in put
ting the debt on a stable basis has
been the object OF many expressions
of admiration by American bankers
| and economists. 1t is to be remem-
bered that the British people pay
800 a year per capita in crown and
local taxes-an amount three or
four times what Americans pay. In
deed, the British are the heaviest
taxed nation in the world today and
yet the first to pay us their debt.
Stops Talk of Cancellation
The Administration at Washing
ton and the American business COM
munity regard the settlement of the
British debt as a matter of prime i'm
portance. The British debt amounts
to nearly so per cent of the entire
Allied obligation to this country. To
fund this on a basis of resolution of
it's full face value and on a favor
able interest basis e~ffectually will
stop all talk Of cancellation from
other debtor sources.
Now, should France come forward
with a suggestion of cancellation o.
scaling down, we need but to point
to the British settlement-half Eu-
ropean debt fully recognized and
funded. How, then, in the name oil
the Most-Favored-Na Doctrine
could we give France, or Belgium, OF
Italy or anybody else any more IA
vorable terms. To borrow an Apo
site French phrase, that sees itself.
The benefit goes even deeper
France has been talking at the peri
odic economic conferences to effect
that il United States will reduce its
debt demands. the French a re-
duce the Preparations demanded or
Germany. Settlement of this British
business puts a stop to such a MAJ
ner OF involving American affairs ir
so alien and tangled a skein as tbs
herman separations. The settle
ment solidifies the consistent posi-
ton OF the United States in this mat
ter, to wit: the Allied debt is {
simple matter of contract between
parties and that's all there is to it.
1t probably would be found tina
cancellation would not prove a pop
ular theory with most of the PEG
pie of the debtor nations, no mat
ter how much their idealists Nigh
discuss and propose it. For it car
be discerned that for a debtor ma
ton to accept cancellation would b'
a serious impairment of credit. NJ
nation which had been the imme
date beneficiary could go into thu
market with much confidence to Dor
row again. Even it's own peopl'
would hesitate to lend to a nation
which previously had failed to re
pay a great loan.
The President said in his messag,
on the British proposal to Congress
that widespread population nigh
very readily follow failure OF the un
l~dertaking and, in this. every Ameri
can will agree he was not wide OF TIL,
mark. But to get the British deb
settled is to give us and the rest o
a world at least a theoretical guar
sntse 81 tbs validity Of the Eest q