Evening star., 1923-10-05

Add to these huge totals interest at
per cent for fourteen months-thats
our government stake in Europe.
These amounts are so vast, so diff
cult to grasp. they cannot possibly
mean anything concrete to any of US
except by way of contrast or COM
parison.
. For this vast sum. high school
every one Of the 5000 counties in
the United States; every irrigation
project in America now held up. for
lack of funds could be completed;
100000 workingmen's homes, cost
ing $4,000 each, could be built and
paid for: the bonded debts of every
state government in the United States
could be paid off, and still the un-
thinkable sum of s,200 millions of
dollars would be returned TO the
Treasury OF the United States. That's
our stake in Europe,
what the Debt Would Buy.
Perhaps we can better comprehend
the interest items on this amount.
The forty-five largest cities in
America in 1922 had school attend.
ance of 100000 pupils. The total
cost of these schools. including all
salaries. interest on bonds. operation
and maintenance, was S222,l57,892-
our interest charges for 1876 days on
the amounts these seventeen nations
ii
States Such figures. then, represent
the European bookkeeping debt to
the United States. The people are,
therefore. faced with one OF the most
tremendous economic and financial
problems ever given to them to meet
since they became a nation.
What are we going to do about
these debts, the interest Of which is
piling up at the rate of $4,000 every
working minute?
IA hnt
this problem answers about like this:
The government of the United States
owes about 23 billions of dollars in
Liberty bonds to its people. With
this IL billions which we get from
Europe We will pay off that amount
and thereby reduce our taxes. II
looks like a simple case OF -arith-
metic-of addition and subtraction.
1t would at first seem SO; but Is it so
simple?
Europe can pay this debt only by
sending us gold, or it's equivalent.
which IS goods. Can she send us
gold? II these nations sent us all
their gold they could pay US less than
No; gold is impossible. The debt
must be paid in goods-that is, these
nations must send to the United
States an excess of goods over I'm =
ports which they buy from ON the the United
"a
for period of forty years.
Must Sell to Pay.
Let us be very clear about this. for
the problem is generally misunder-
stood These debts were created, in
the first instance, by America selling
goods to Europe. They can be paid
only In the same manner--by the
European debtors selling as much to
America as America has sold to them.
plus interest If we compel Europe
to use her export Of goods to square
accounts on debts now owing to US
we must understand that Europe can
not, in the very nature of things. use
these same exports over again in buy
ing future goods from us. We cannot
eat Europes cake and have 1t too.
Let me illustrate, : In 1923 the
United States sold-to these seventeen
debtor countries of Europe goods to
the value of Its millions of dollars
and purchased SIG millions from them.
This. shows our debtors were still
borrowing money. They had left
1,102 millions of dollars worth of
goods to pay for bsIore they cou,o
pay a cent on this additional 900 mill
lions of annual interest charges and
amortization of the United States
government debt. In a word, IL the
United States compels these seventeen
nations of Europe to settle FOR these
past debts in the face of Europe
present unfavorab1e balance of trade,
as the "pay-up" advocates demand,
naturally Americas export trade will
dwindle almost to zero. If we insist
on payment, it will not be consistent
or .iegical, or even fair, to set about
erecting high tariff walls to- protect
ourselves from such q surplus OF