Evening star., 1925-11-05
TRANSFER ABILITY
ITALIAN DEBT CRUX.
Plea That Italy Can Pay Only
as u. S. Takes Her Products
Is Weighed.
BY FREDERIC WILLIAM VILE.

| Capacity to transfer"-there's the
! rub in the 1taloAmerican debt nego-
tiatiOns now proceeding here 1t is
! considered by both sides the crux of
! their whole problem. The Italians will
! adhere with a good deal of tenacity
TO the proposition that, having no
gold with which to pay, they can pay
only in goods. That contention car
ries them to the point of asking how
they can make appreciable payments
in goods to a creditor country main
tanning a protective tariff as prohibi-
tive in many respects as the United
States tariff is. Italy says. in effect.
that she has capacity to pay" only
in so far as she is granted capacity
to transfer" All she has to trans
fer" is the products of her soils, her
factories and her labor. Will America
nable her to transfer" them in order
that the proceeds of their sale in the
, United States market may be con-
verted into gold payments on account
of the $4,000, 100000 Italian debt?
One of the - terss little booklets
on ltalys economic and financial re-
sources, which provide the "documen.
tation' Mussolinis men have laid
before Secretary Mellon and his col
leagues, deals exclusively with Ca
pacity to transfer" None of the book
lets is engaging closer scrutiny in
Washington. Before many days are
| over, it may turn out that the Italo-
American negotiations succeeded or
failed over the transfer question.
! There Is a disposition on all hands to
concede that 1t goes to the root of all
the matters now under discussion.
Next to capacity to transfer" the
overshadowing factor is the effect
| upon the present parley of the failure
of the Franco American negotiations
Il month ago. Opinion Is sharply d.
vided on that score. Some authori-
ties believe that the French fiasco
promotes the probability Of success
full dealings with Italy. Their argu-
ment Is that the Collidge administra-
ton, admittedly anxious to face Con-
gress with a record of achievement in
the debt-funding field, cannot afford to
chalk up another failure. The reason
ing is that, due to the administra ton s
| anxiety to secure results, Messrs. Mel
Ion, kellogg and Hoover will go to
all reasonable extremes to obtain
them. But other authorities assert
that Italy will he offered no far-reach.
ing concessions because of the ad-
ministration fear that France would
hurry along with a demand for equality
of treatnnent-for treatment perhaps
American proposition. The French, of
course. are watching the Italian no.
gotiations with an eagle eve. Every
possible advantage will be taken of
them when the Painleve government
resumes its dealing with Washington
Last Centers" Staggered.
This writer encounters a wide
spread view that the administration is
bolder with regard to Congress than
it was before the French negotiations
broke down. These are regarded as
having given the last red-cent' party
on Capitol Hill a staggering blow The
ill starred French affair taught that ii
is one thing to demand the last red
cent" and quite another thing to get
it. Short of sending an Army and
Navy to Europe to collect our debts
the abortive negotiations with the
French showed that when debtor
government says Impossible" or
Your price is too high" there is very
little Uncle Sam can do about 1t.
One other factor requires mention
ing which enters into the psychology
of the ItaloAmerican negotiations. 1t
has escaped general notice that vtr-
tually every debt settlement made with
a European nation since the British
settlement in January, 1928. has been
marked by increa sing American leni-
ency.
The process hegan after, not with.
the British arrangement which was
made, according to the British. with
out any regard to capacity to pay"
Since then. Finland. Hungary. Lithu
ania. Poland. Latvia. Belgium and
Czechoslovakia have funded their
debts While adhering to certain
basic principles of settlement, the
United States has indicated a system
attic trend In the direction of leniency.
Italy Is not likely to be revealed.
when the American offer can be made