Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-02-17
DEBT ISSUE SETTLEMENT.
10 in FAIRNESS, U. S. PLAN
Would Avoid Unpleasant Aftermath OF
Delayed Settlement of Obligations
by Foreign Powers.

reports that the debt to France, with
interest compounded would more
than equal today the debt of France
to this country.
Assistant Secretary OF the Treasury
Eliot Wadsworth, in a regent ad-
dress, discussing the chaotic condi-
ton which followed the American
revolution, took occasion to correct
what he termed a general impress
ston'' that the colonies did not pay
their foreign debts. Furthermore. the
Treasury Department has shown in
detail the manner in which the revo-
lutionary war was financed and the
method employed for the repayment
Of these loans.
The revolutionary war, it was ex-
planned, was financed largely by CD
foreign loans, (2) aids and domestic
subsidies granted by France and
Spain. ca domestic loans. (D the Is
sue of irredeemable paper money. (5)
loans fioated by individual colonies.
France made four loans to the United
States during and Immediately after
the war Of the revolution; Holland
four loans and Spain one, all of
which were negotiated by the Cont
mental Congress prior to 1890.
Interest Once RENTED.
These foreign loans Of the federal
government amounted to S10,09S,1O6
on January 1, 1890. The debt to
France resulting from the four loans
made between 1911 and 1888 was
sS,350.ooo. During the revolutionary
war the colonists had not always been
able to pay interest on these loans,
and in July, 1882. France RENTED the
arrears Of interest on the second
loan. and from that time to the Gate
of the treaty of peace.
With the exception of the interest
remitted, the United States paid in
rerest and principal In full ultimately.
About $2,000.000 was still unpaid in
1895, and this amount was converted
into domestic stock, bearing interest
at Az and 5ia per cent. This stock
was all paid off between 1907 and
1915. I
Four loans were negotiated In Hol-
land between 1882 and 1888, amount
Ing to $3,600.000, and was promptly
paid as stipulated In the contracts.
and one loan negotiated with Spain
in 1881, amounting to $4,000, was
paid in full ten or a dozen years
later.
Two Outright Gifts.
IN addition to these loans there
were. granted. to the struggling
American colonies subsidies or gifts
by France and Spain between 1875
and 1881 amounting on the part of
France to s1.S15.000 and on the part
of Spain to $1s1.0eO. These were
gifts outright to the Americans. who
were lighting the then enemy Of
France and Spain-England.
Besides the adjustment of 1875, the
mutual claims Of France and the
United States were the subject of
several treaties, the earliest nego-
tiated in 1900. followed by that Of
1903, by which Louisiana was ceded
to the United States.
Commenting upon the manner in
which the infant republic had met
the situation which it confronted
after winning the revolutionary war
and the adoption of the Constitution,
Assistant Secretary wadsworth in
his address on the liquidation of the
debt said:
THE fact that new and strug-
Cling democracy assumed the old
debts OF the nation and the states
as we'll and In due course paid them
is worth recalling"
Debts Provided For.
He added there had never been any
question raised as to the full pay
ment Of the foreign debt. Hamilton's
plan, enacted into law by Congress
August 4. 1890, provided that, with
the exception of 100000 reserved for
the ordinary expenses Of the govern
ment, all collections from duties on
imports and tonnage should be ap-
piled to the payment of, the overdue,
current and future interest and the
reduction of the principal of the
foreign debt. The law further pro-
vided for a loan Of $12.0O0,0O0 with
which to pay of the foreign debt, and
loans aggregating $s,400,000 were OBJ
tanned in Amsterdam and Antwerp for
this purpose between the years 1870
and 1874. all of which were paid of
by 1909.