Evening star., 1925-01-04

Great Britain, debtor and creditor,
but much larger creditor than debtor,
proposed first a general cancellation,
all debts to be annulled and German
reparations scaled down to the costs
of actual reconstruction. This was
rejected by America, since we should
have forgiven s12, ,0oo, ,0oo, 900 debts and
been forgiven nothing. Britain now pro-
poses to ask from her continental
debtors, Germany and the allies alike,
only annual payments which will just
| carry her debt charge to us. a sum
| which in 1892 will, at its maximum,
amount to $12A 100000. But she de-
mands that her allies shall be re-
sponsible for the whole sum in case
| of German default.
Arguments of France.
The French take a double position,
as do the Italians and the Belgians
AS to their debts to Britain, they say
| in substance that British loans repre-
sent a contribution to a common
cause; that France spent more in
blood. losing 100000 lives against
100000 for Britain. and that in addi-
tion. France was the battle-ground.
| Therefore they have so far refused to
discuss funding the British debt. AS
to the American debt, they say that at
present Germany Is paying nothing
and German payments for the future
| remain problematical; that unless
Germany pays France cannot, and
could not in justice be asked to pay.
| Accordingly they ask in our case for
postponement of all payments un-
til their ability to pay is determin ed.
Like the Belgians and the Italians,
they assert their total inability at this
moment to pay anything.
AS to $7,0oo,00o,o00 owed US by
continental European states, then,
we find ourselves faced with the fact
that the debtor nations. France, Italy
and Belgium-and the Belgian debt Is
very small, comparatively-as
their present inability to pay any
thing and their present ignorance of
their ultimate capacity to pay since
that capacity, in the case of France
and Belgium. depends, SO these coun-
tries hold, upon German performance
under the Dawes plan.
Problem Is Complicated.
But the situation is further com
plicated by the fact that France and
Italy owe Britain about as much as
they owe US and are paying moth
ing, while Britain is paying u.s.
Therefore the British insist that these
two debtor nations shall pay them
proportionately as they pay us. But
since these nations regard their Brit
ish and American debts in a different
light, this Is tantamount to prevent
ing their undertaking any settlement
with US. The British argue also, un-
officially, to be sure. that if we in
the end give the French or Italians
better terms than the British re-
ceived under the Baldwin plan, then
that agreement must be revised
Moreover. the three debtor nations,
France. Britainsand Italy. regard our
domestic policies as singularly unfair
to them. We insist upon the pay
ment of large debts. which were con-
trscted in goods-that is to say, the
debts represent goods sent by US to
them-but We enact tariff legislation
which excludes the products of all !;
our prohibition cuts off French wines
our immigration laws exclude Italian
immigrants and our new mercantile
marine. operated by the Government,
gravely reduces British earnings in
this important direction. Thus we
insist upon payments which can only
be made in goods or service. while
taking care that neither the goods
nor the service. nor the labor, in the
italian case, shall be admitted or per-
formed.
Importance of Meeting.
Now when the European nations
meet in Paris a few days hence. what
can they decide? The British will
ask that their allies undertake to
make good the difference between
German payments to Britain and
British payments to America up to
the total sum we are receiving,
namely, 1884, 900, 600. using the maxi.
should pay under the Dawes plan
which fixes her annual contribution
at $500, 100000 in round figures, this
would not be excessive. for the Brit
ish share would. be $132,o0O.0OO.
leaving but s50,0Oo,Oo0 to be found
by the allies, mainly France and
italy. This might be an easy way
to abolish a debt of $1,000 00O.O 900.
But what if Germany did not pay?
Then. in substance. France and Italy
would have to undertake the Brit
ish debt to the United States while
they would suffer by the failure of
Germany to pay them directly. And
Britain, being assured that if Ger
many defaulted France and Italy
would have to make good, would
have no reason to join her allies in
making Germany pay. On the con-
trary, If coercion threatened British
trade, the British would have every
reason to oppose it's employment
the question the recent proposal of
Winston Churchill, which was 4 repe-
tition with amendments of the orig
inal Balfour proposal of three years
ago. But the British will certainly
insist that France and Italy make
no payment to the United States
save as they agree to equal contri-
button to Britain-and both nations
will agree to this without much de-
bate.
Other Debts Rated Low.
1t is true that the British financial
world believes Britain's debts to
America are the only live debts in
the whole collection and have long
regarded the interallied debts as
scraps of paper. They have also
privately expressed opinions favor
able to general cancellation. But
the British taxpayer, who contributes
81 a head annually on his American
debt, can hardly be persuaded that
at the same time he should forgive
debts owed to him to double or
treble the amount.
But neither is it possible to cont
vince the French taxpayer, who has
to carry the burden of reconstructing
his devastated area without any Ger
man contributions. that he must un-
dertake to pay his allies while his
enemy Is not paying him, and must
also agree to pay even If his enemy
does not pay him eventually-and
what is still more difficult. he must
pay his British ally a greater sum,
II Germany having failed to pay
France, also fails to pay Britain.
Further than this he is puzzled by
the fact that while his creditor al
lies have never ceased to argue for
the reduction of the sum of Gernla n
reparations, they hold out stoutly y
gainst any reduction of the debt due
by him to his allies.
AS for the italian, he has no debts