Evening star., 1924-12-14
ny FRANK ii. sIMONDS.
- HE swift collapse of the

over the question of the
French debt and the unmiS-
taxable interest and criticism which
these discussions awakened in Great
Britain should serve to emphasize
again how unfounded in fact is the
American -official theory that there
Is no connection between the ques-
tion of the debts of European nations
4" the United States and to each
6.Fer.
At the present moment Britain is
paying us on account of her war debt,
the principal of which is slightly
less than S4,200,00 900. Certain other
foUntGies are paying us on loans
--HsSt, added to the British, bring
]. TO approximately $4,000, ,0O0, 900 the
11tal on which we are getting re-
FsE'ns. But there are still S7,000,000,-s
Aso on which no payment is being
made. and the chief items are almost
$4,000. 100000 due from France, and
little less than $4,000, 100000 from
Italy, together with a much smaller
sum from Belgium.
Allies Owe Each Other.
But the same nations also owe
Britain very large sums, SO, 100000
000 in the case of France and some
thing like $4,000, 100000 in the case
of Italy. France, on the other hand,
Is the creditor of Russia and various
smaller nations as well as Italy and
Belgium, for relatively vast sums and
in addition she is the creditor of Ger
many on account of reparations for
payments which under the Dawes
plan might represent a capital value
of S7,000.o00, 900. But for this latter
she gets practically nothing until
the moratorium of the Dawes plan
expires, while from her other loans
She gets absolutely nothing.
AS the situation stands We who
owe no one dollar. are getting paid
sl60,O00,000 annually by the British
on their debt of $4,000. .00O,000 but the
British. who are owed $4,000, ,000,0 900
by their allies. and are entitled to
22 per cent of German reparations,
are getting nothing on either account.
AS for the French, they are paying
nothing and getting nothing, save a
small fragment of reparations, and
their situation is complicated by the
fact that they have had to raise and
expend upward of s3,500, 900, 900 to
restore their devastated area.
Urged General Cancellation.
In the opening phase of the discus
sion of debts the unofficial discus
sion, the British thesis, presented by
Keynes, was that there should be a
general cancellation of debts all
around, and as a detail a reduction
Of German reparations totals to a
small figure. This would have
amounted to the sacrifice by the
United States of the whole of her
claims upon Europe, $l2,080.0O0, 900,
without any balancing return. Brit
ain would have been freed of her
S4,200,000, 900 debt to US, but would
have surrendered claims amounting
to $S,000,000,000 upon Europe, together
with most of her reparations bill But
the actual value of the surrender
would hardly have been equal to
what she was freed from paying us.
France would have gotten off from
a $4,000, 100000 debt to US and
$500, 100000 debt to Britain, but she
would have had to cancel much larger
claims upon Russia, Italy and Bel
gium and take reparations payment
which at most would no more than
cover the S4,000,0 900 necessary to
complete her restoration. Italy and
Belgium would have been freed from
debts without having to cancel any
claims, since they had none, and the
total of German reparations would
have been reduced to under IS ,000,-
000,00
Refused to Hold the Bag.
Such a program, however, broke
down at once by reason of the nat
ural American unwillingness to hold
the bag, for the whole scheme was
based upon our surrender Of $4,000
100000 of claims for our war and
postwar loans to the allied and sue
cession states. The situation then
resolved itself into three separate
discussions-that of the American
debts, that of the interallied debts
and that of German reparations.
Two years ago, before the Ruhr,
the British. came forward with a pro-
\, ,f1l
ment to cancel all of the debts owing
them from their wartime allies save
hat annual payment which added to
the sums to be derived from Germany
would cover the British payment to
The United States. And in the mean
time the Baldwin Mellon agreement
had fixed the British payment to us
at an annual contribution of $780,
100000, rising to something over
$170,000.000, and continuing for so
years. This offer to the continental
nations was based upon certain po-
litical considerations and was de-
signed to forestall French occupation
of the Ruhr. But the British pro-
posal was rejected and lapsed.
Baldwin Terms Criticized.
Thereafter a new situation arose.
The British only consented to under
take payments to America with great
reluctance, and the Baldwin terms as
we'll as the American insistence
thereon were sharply criticized. But
having undertaken to pay us, the
British then began to consider pay
ment from their continental debtors,
and their demands upon France
were-so far as popular feeling was
concerned, for no official demands
were ever made-accentuated by the
fact that it was held that the French
invasion of the Ruhr was reducing
British trade and injuring British
prosperity.
The continent on its side bitterly
criticized the British agreement with
America insisting that the British
should have refrained from any sepa-
rate agreement and shared in joint
discussion of the whole question of
American debts with all the European
powers represented. None of the con-
tinental nations felt they could un-
dertake any payment to America In
any present time or ever on the terms
of the Anglo American settlement.
Thus the British negotiation seemed
TO the continent at one time unwise
from the British point of view and
unfair from the continental. And 1t
is necessary to add that it was and is
violently criticized in London.
With the acceptance oe the Dawes
plan by Europe and the fixation OF
the amount of German payments
that is, the theoretical maximum, for,
in advance there can be no defipit1ve
estimate of what Germany can and
will pay--it was obvious that the
next step in the clearing away of
the debris of the war was settle
Z ment of the problems of debts, inter-
allied and American. And there was
a pledge made by. Macdonald to Her.
riot in London when the Dawes plan