Evening star., 1925-01-04
FATEFUL PERIOD OF WAR
! DEBT ADJUSTMENT HERE
NJ. S. to Be Represented at Paris Confer
ence-Tension Increased by
Recent Exchanges.
BY FRANK III. sIMoNDs.


NV allied debts enters a new
phase as a consequence of
the meeting of the Euro
Dean allies in another Paris confer
: ence While the United States will
he represented in this conference for
the limited purpose of protecting a
claim we have for s5o0.0o0,o00 against
the German payments, we shall be
outside the main discussion, since we
have always declined to agree to any
general consideration of the whole
subject of interallied debts as one of
the group of allied nations.
IN reopening this examination of
the whole subject Of debts it is, per-
haps, worth while to start from the
point of view of the several nations
and with the thesis which their
statesmen have maintained and will
maintain in all future discussions.
THUS we may discover that there is
no more fruitful cause of misunder-
standing than the belief in the United
states that the whole problem is ut
terly simple and capable of but one
solution.
Situation at End of War.
To begin with the American point
of view, our GovernSnent maintains
and our public generally believes that
the situation is this: France, Britain
and Italy borrowed large sums of
MS during the war. At the close Of
the war, although we had made large
material and financial contributions to
the victory, which without US could
not have been won, we declined to
share in the Spoils, territorial and
otherwise, and refused to share in the
German reparations payments, save
in totally minor details. BY contrast
We asked our debtors to fund and
pay the debt which they had incur
red here and thus take off the Shout
derS of our taxpayers the burden
they were carrying.
We said, and say, in substance, "Eu-
rope owes us $4,000, 900. 900, lent dur
ing the war, raised from our people
by the sale of Liberty bonds, and now
constituting more than half of our
entire national debt. The case is
plain, the debt undeniable and we are
tired of bearing the burden"
The British standpoint is quite diff
ferent. Alone of the European ma
tions which are our debtors, the Brit
ish have been able to begin payments
TO us. They are paying US on a debt
fof $4,000, 100000, and their annual
payments for the next 60 years will
rise from s160,OoO,Oo0 to S1s4, ,ooe,0 900.
But the British not only borrowed
from us, they lent to their European
about the same sum we did, namely,
something now, with unpaid interest,
approximating $4,000, 100000 But
while they are paying US on their
debt, none of their allies has made
a move to pay.
Burdens of England.
Thus the British, like US, are car
rying a domestic debt in the shape
of bonds issued to bear the burden
of the funds loaned to their allies
and at the same time they are pay
ing US on account of the money
which they borrowed from US. II
their allies paid them what is owed
the British would not only be able
TO liquidate their debt to US, but
reduce their own debt by some
$4,000, 900, 900. This, too. without any
regard to German reparations, in
which they are entitled to share to
the extent of % per cent.
Now the British say, "Since Amer
lea makes us pay, our allies must
pay us enough to meet the American
debt, but We are willing to deduct
from their payments whatever Ger
many pays on account of repara-
tions. In a word, we are willing to
wash out all the double claim of
debts and reparations, SO far as we
are concerned, If we can settle on
the basis of what we owe America"
They are then willing to scale down
claims which in the aggregate would
amount to more than 5000, 10000
10 the $4,000, ,O0O,0 900 which they have
TO pay us.
( The French situation is different
e gain. Like Britain, France owes
and is owed, but. unlike Britain,
France. aside from reparations claims,
hnn cbn ic tn,
addition, has to carry the burden of
s4,000,000, 900 raised to reconstruct
her devastated area France, there
fore, holds that she cannot take up
the question of paying her debts
abroad until she finds out how mucn
Germany is going to pay her. Owing
America 100000 and Britain
$3,000,000, 1000, France is owed, out
side of reparations, $4,000, 100000.
Eject of Russian Regime.
But the claims of France and Brit
ein upon their allies are woefully
affected by the Russian revolution;
Russia owes Britain above $4,000
fHu,OO0 and France in excess of
$1,000, 100000. The Soviet has re-
pudiated all debts and cannot be
forced to pay. Therefore these parts
of the claims of the two nations
Ms to Italy, her situation is much
worse. She owes America $4,000. 900
o1t and Britain $4,000, 100000, while
size is owed but 100000, and her
share of reparations, amounting to
1g per cent, could not at most net
nrpre than the value of S150O,O0O. 900.
Apo Italy, too, has had to face the
pFoolem OF very expensive recon-
Fuuction in her own devastated area.
treat Britain can get rid of the
burden of any foreign debt-fiirst. if
the Germans pay the sums fixed in
the Dawes plan, since the British
snare nearly equals the British debt
10 Us; secondly, If her allies pay the
uHference between British payments
10 rs and German payments to Brit
bW.H She has two strings to her bow.
france can escape the burden of
1ere!gn debt if Germany pays her
reparations, for the French share
would equal the French debt, both to
1he United States and to Britain She
Scould also be able to meet about half
her costs of reconstruction If her
European allies outside of Russia
paid up. But Italy has to bear bur
sden of $3.000.000,0 900 in foreign debt
even if she gets her share of repara-
tions and her debtors pay up their
small accounts.
Belgium Heavily Burdened.
Belgium is in the Italian situation.
She owes S700,0o0,0oo. mainly to
France. Her sole asset is her claim
against Germany, which under the
Dawes plan might bring in $3.50, ,000,-
oo0, or enough to free her from for
<'iGn debt and about pay for the re-
construction of her devastated area
But if Germany defaults, she must
bear the burden alone
Now then we see the bases of the
various national policies. The Amer