Evening star., 1925-08-02


/ debt. We had gone over the grounds
# of the unwillingness of France to
/ pay, but unwillingness to pay does
not necessarily preclude intention to
B, pay. Whenever debt reaches the
Z stage of being a dead horse" as we
I say at home, it is very likely TO en-
gender a very considerable amount
of unwillingness in the matter of its
payment. And the French debt to
America is very much of a dead
horse" as the French see it.
On the other hand. Willingness to
pay would not necessarily be accom-
panied by an intention to pay. The
matter of ability to pay inevitably
runs along with and either supports
or disCourageS whatever intention of
paying there may be. France, con-
sidered as a whole, makes no secret
of its unWillingneSs to pay. But 1t
processes an intention to pay-and I
think the profession Is sincere-f and
when the time arrives that intention
IS supported by ability.
National Credit at Stake.
There are a number of very COM
pelling reasons back of what l be-
lieve is a sincere intention on the
part of the French people and their
government to pay their debt to the
American government. In the first
place, Frenchmen know that the en-
tire fabric of international credit
would break down following a repudi-
etion of international debts. This
would be a disaster which France
could not afford-a, greater disaster,
perhaps, than was the war itself.
Not only would it utterly ruin the
commercial credit of France and
cause untold damage to her hopes of
foreign trade, but it would make 1t
impossible for her to borrow money
abroad in the event of another war.
And the fear of another war hangs
over France like pail. She is look
ing everywhere for assurance of sup
port against the day Frenchmen be-
lieve certain to come when Germany
will launch a war of revenge, and in
telligent F'renchmen know it would be
suicidal to cut off the hope of finan-
cial support from America. There
fore, I think their professions of in
tention to pay their debt TO America
may be accepted at their full face
value. 1t is true there has been in
the past a lot of noisy talk about
Reputation, but there was only an IN
consequential volume of public opin-
ion behind such talk. Americans
ought not to predicate their attitude
toward France upon the outputtings
of noisy politicians. We have politi-
clans of the same type at home, and
certainly Americans would not want
their own country to be judged upon
the basis of these political vaporings.
France intends to pay the debt TO
America, but it intends to get it scaled
down by every possible dollar before
beginning payments. There has late
Iy been q lot of talk in Paris about
the necessity of auditing" the Ameri-
can account, whatever that may
mean. ~.
Nothing to Be Audited.
When a man goes to his bank and
negotiateS a loan. giving his note OF
hand in exchange for cash or credit,
there isn't anything to audit as be-
tween the bank and the borrower, ex-
Cept possibly as to the amount of the
notes held by the bank. And | never
have heard a question raised as TO
the accuracy of the total of Frances
notes held by the United States Treas
ury. 1t can hardly be possible that
France wants to go back and audit
the purchases it made in America
with money borrowed from the Ameri-
can Treasury. At the time the loans
were made our Treasury officials spe-
Cif1cally refused to take responsibility
for such purchases, contenting them
selves with requiring only general
statement as to the purposes for
which the money was to be used.
What sort of a reception would a bor-
rover get if he went to his banker
with a suggestion that his loans
should be scaled down because he had
used the money unWisely?
It is not reasonable to believe that
this is what the French government
has in mind, though such an inter
pretation has been placed upon II
here. It seems more likely that a
clue as to what is meant by an audit"
may be found in the suggestion. of
offset charges to the American bill.
The American Government has Equi-
dated every bill presented by France,
and holds Frances receipt therefor,
for services rendered in connection
with bringing an American Army to
France. But now there is the sug-
gestiOn that all such bills were not
presented and that a considerable sum
is still due France from the American
Government. They may be able to
dig up some such bills, but 1t Is hardly
likely they will be able to get the
American Debt Funding Commission
to accept them. When American
troops were in France the French
government was prompt TO present
bills for every conceivable sort OF
service. and the American Govern
ment paid cash over the counter. 1t
is rather a late day now, six years
after the end of the war. to bring
forth additional charges.
Loans to Lesser Allies.
Another French claim is that she
ought to be given credit for the sums
she loaned to the lesser allies and
which she has not been able to collect.
These loans amount all told to $2,717,-
908,50 not counting interest. Inter
est has not been computed because
there never has been an agreement
among European allies as to what
rate of interest war loans should bear.
If America and Great Britain would
accept the French contention and
scale their claims against France pro-
portionately il would make a very
substantial reduction in the total of
Frances debt. But America will not
accept any such offsetting claim.
That proposition has been thoroughly
explored and an iTrevocable decision
reached.
This latest French claim to an off
set is merely revival of the con
tentions in the now famous Balfour
note, which were so effectively ex-
ploded that even the London Econo-
mist conceded their fallacy. The Bal
four note contended that a large part
of the British borrowing in America
was for the purpose of enabling
Great Britain to make loans to the
other allies. In fact. the Balfour note
stated explicitly that the United
States insisted that. though the other
allies were to spend the money, it
was only upon British security that
Fthe United States was prepared to
lend 1t.
Nothing could be farther from the
truth. At the very beginning the
United States Treasury laid down the