Evening star., 1925-09-13
Correspondence of The Star and New York


Correspondence of The Star and New York
World.
LONDON, September SIT is a.
newspaper axiom that nothing bores
readers like figures. And the bigger
the figures. the more they must bore.
For the mind refuses to grasp the
meaning of billions, whether they are
francs, pounds, dollars, marks or
miles to star. The inter-allied debt
problem, as generally expounded
consists largely of impressive and be-
wildering rows of astronomical sta
tistics Moreover, it might seem that
everything that can be said about
war debts has been said, that they
might now be left for the actuaries
of high finance to work out and
settle
In this wilderness of millions and
billions. Of innumerable Zeros, there
still exists material for drama. In
ternat1onal hatreds that may last un-
til the time of our children's children,
the clash of compelling personalities,
the hazard of political fortunes-all
these are involved in the negotiations
now under way for funding the
French obligations to the United
States and Great Britain. The human
aspect of the problem proved most
fascinating here this week to those
who learned something of the inside
OF the duel between those two SEN
sational politicians. now finance min
listers, Caillaux and Churchill.
Caillaux Future at Stake.
Caillaux is stalking his whole politi-
cal fortune on his ability to get from
the United States funding terms as
good as those which Churchill offered
him here. offered with a large string
tied to them. Britain will accent an
annuity of SG2. .500, 900 for 90 years in
full settlement. This offer, worked
out in terms of 'present-day value"
means a cancellation of 60 per cent
of the present French debt to Eng
land. But the string is this, that un-
less the United States makes terms
just as favorable to France, then the
British offer is withdrawn and the
British demand rises automatically to
the proportonate American figure
What this means is that the United
States, if Churchill's proposal Is to
hold, must let France off with pay
ments OF 100000, 900 a year for 81
years, or something exactly equiva-
lent. If this were done, the United
States would be Canceling 90 per cent
of the French debt. The annuity
would be higher than the British, be-
cause France owes US more money,
but the proportion is the same
Put another way, the British solu-
ton amounts to a payment by France
of almost exactly per cent on the
capital value of the debt If the
"present-day value" of the debt were
fixed at its face value, interest Of
more than per cent would have to
be paid.
r. I
Caillaux is gambling that the United
States will not feel morally able to
exact higher terms from France than
have been Conditionally obtained by
Britain. Caillaux even tlod British
ministers and leading bankers, while
here, that the United States would
probably take the same sum as Britain
-S62 500 900 a year-which would
bring the rate of interest paid to the
United States to about l12 per cent,
and reduce the present-day value of
the French debt to America by about
three-quarters.
No information reaching here has
led the British to suppose that the
United States will, in fact, accept less
than 312 per cent. Even if Washing
ton comes down to per cent, which
is thought the maximum concession
likely, then the British demand on
France will automatically go up from
S62. 100000 to about SS5 5,0O0, 900 This
is more than the French will agree to
pay, according to present information
from Paris, where indeed it is at
present not certain whether Caillaux
can secure the adoption of the British
2 per cent offer, which amounts to
more than 1,000, ,0000 900 francs a year
at the present rate of exchange.
Caillaux thinks, and made no bones
about telling his hosts here, that the
Americans are bluffing. He conceives
that he has created the conditional
settlement in London d debtor bloc
against the one creditor nation He
declared. of course in private conver-
satlon only, but most forcefully, that
the United States will never face the
moral stigma that will fall upon her
i'll the opinion of the whole world If
she destroys the British settlement by
asking more than Britain agrees to
take. His view is that since Britain