Evening star., 1925-09-24
PAYING BY FRANCE
TO BOLSTER CREDIT.
Reduction Seen in Cost of
Borrowing on Settling
of War Debt.
BY DAVID LAWRENCE.

many protestations of inability why
Is there AT last a definite desire TO ar
range payments? This question must
occur to many as the French mission
| headed by Joseph Caillaux. minist er
OF hna no@, gives out optimistic state
ments faIecasting a settlement.
The answer IS To he found In the
international credit situation and the
plethora OF American private funds
ready for investment. The French
government not only needs money
now. but will need large sums in the
next few wears To refund her internal
obligations. which now require high
/ interest payment. II France can re-
duce the cost OF borrowing both at
home and abroad. she will save many
millions of dollars annually. The terms
which the American Governments will
give France are not radically differ
ent from those which were given Bel
gium. But almost any reasona bic
terms are more desirable from the
! French viewpoint than no terms at
all and continuation of the present
uncertainty.
American officials expect that as
soon as the debt question is settled
the French will he in the market for
! large loans and that these loans prob
ably viii be obtained at relatively
the French would have to pay if they
didn't settle their debt And the
| French can borrow money for long or
| short terms at better rates than IL
| they didn't clear the horizon of the
American debt problem.
Faced Loan Boycott.
| What's r,nre-the situation had come
/ to such a point that France faced
/ ,t,EtA
/ the American capita lists who had been
/ persuaded by the American Govern
| ment to make no loans till the war
debt was settled. Under the circum-
| stances the French had no alterna
| tive. They had 10 settle.
In sending NJ. CailiauX To this coun-
( try with mission composed of the
leading members of the French Par
| lament France has really transferred
| her government to Washington so far
! as final power and authority to act is
| concerned
The French are anxious. Of course
/ to get as lenient terms as possible
| and they have spproa ched the Amer
| lean Government with all the court
| esy and tact that can be mustered
for the occasion. They have known
| In advance, for instance. that II is OF
no use TO discuss a reduction on the
| This sum was lent. Ii must be paid
| In full. But America is no oppres.
sive creditor. America is not insist
ing on a last pound OF flesh Ability
to pay aE well as considerH tion for
the traditional friendship between
! France and the United States
prompts the American Government
TO offer to accept terms that will re
duce suhsta ntiallr the amount that
ha
interest rate had heen charged.
America had the right, of course
to charge and insist upon fun pay
ment of interest. Rut the United
States does not intend to ask for fun
payment The politicians here rea-
son that the American people will &C.
cept settlement that means tull nav.
ment Of principal and viii not object
to leniency on interest,
Sfxfy-two-Year Limit
While theoretically interest and
principal are separate considerations
they become In n negotiation a sinr,.
problem. What the Commissioners
now are discussing Is what lump sum
! shall be paid annually. France is en-.
! deaNosing to persuade America that
her ability to pay contemplates Ger.
i tain lump sums each year and that
subtracting from the annual amounts
certain portion as applied to prin-
cipal the remainder can he figured as
| the~interest payment. BY this reverse
process. so to speak, are the French
trying to get an interest rate that
will not only he tolerable now but
which will help them in future years.
Whatever the amount Of the pay
ments. however. the net result must
he the full payment of the principal
within 81 years which is the term
given both Great Britain and Belgium.
Any one with an enthusia sm for
mathematics can figure out just what
the French figures will he provided he
knows what the French capacity to
pay really is or rather what the
French ministry thinks 1t can risk for
future years. There is talk of a/$25,-
100000 payment the first year and
fer four years thereafter and then
gradual increases up to $98. .000, 900 an
nually. The annual sums will be A
matter of dickerinG and rearrange-
n1ent for several days, but ultimately
the French will agree to something
and take chance on what future
genera tions will do about 1t.
Copyright. lQg5.)
a