Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1925-03-27
SOUND PRINCIPLES :
FOR ALLIED DEBTS
Payments to America Should Be
Guided by Dawes Plan,
Says C. E. Mitchell.


The fundamental principles of the
Dawes plan for settling the European
war debt question are applicable to
the problem of the Allied debts to the
United States Charles E. Mitchell.
president of the National City Bank
OF New York. declares in an article in
the American Bankers Association
Journal. Mn Mitchell says -.
Debts between nations are always
a source of international tr6uble. and
| consider it a great importance that
our own econdAic as well as political !.
relations with such countries as
France, Belgium and Italy may be Inn !
proved by an early adjustment of
their debts to our own national goy-s
eminent.
Country Endorsed Dawes Plan
Il hope that we are gradually learn.
ing that such debts, If unduly forced. j
may result more calamitously to the
comm ercial interests of our own coun-
try than to those of the debtor coun,
try. This talk of forcing payment OF
every dollar to the last penny is
commercially unwise think we may
assume that the Dawes plan has had
the Endorsement of the American peo-
pie through their election of General
Dawes to the Vice Presidency of the
United States. That plan is one that
establishes fundamental principles
which may be applied in considering
the debts of one nation to another
resulting from war
The first principle. as l see it, is
that the yoke of the war debt shall
not be held as a burden upon the
people beyond the generation that had
to do with the war. This principle is
clearly intimated in the fact that the
industrial and railway debentures
which form the principal security and
means Of payment of the debt carry
5 per cent interest with / per cent
amortization, which means that sueh
obligations are to be over a period Of
about thirty-six years
An Invitation to Trouble
ANY attempt to force lthe carrying
Of such debt burdens to the second
and third generations is but an en-
graved invitation to further trouble
THE Second principle is that the
debtor country shall be taxed to the
limit while the debt remains. but in
| no event to a point where its eco
| nomic structure collapses under the
strain. ana. fsazther. that the. rationale
| OF the debtor country shall In no case
| have lesser burden of taxation upon
| them than have the nationals OF
| the creditor country-another princi-
pie the soundness of which cannot be
questioned.
THE third principle is that with
such taxes collected, payments there
from shall be made to the creditor
country to such an extent only as they
can be made without disrupting inter.
national exchange and commerce. The
| soundness Of this last is apparent on
its face
"These 1 regard as the fundamental
| principles of the Dawes plan. and ali
of the hundreds o. pages of the so,
called Dawes report are devoted 10
setting up the machinery by which
these principles can ne put into effect
"If these principles are accepted as
| sound then they must also be sound
| principles by which the payment Of
| the debts OF allied countries to "a
shall be determined, and we would
j best apply such a yardstick as our
measure. rather than attempt to make
popular the slogan of every dollar to
the last penny In the adjustment Of
! our foreign relations, essential to the
t development Of increased export and
import trade. there can be no problem
of greater Importance than reaching
7 sound and final conclusion as to this
irritating question of the debts of al
| lied countries to ourselves"