Evening star., 1926-01-10

Continued from First PageJ
and coming out S95.o0o.ooO ahead 50
far.
As for the British. they are paying
us around SI6l. 900 900 annually but
MIR. Hoover has demonstrated that
while this tribute to our Treasury is
being paid by the British government
British rubber industry is collecting
over $500, 600 900 in excess Of normal
costs from rubber sales alone. The
American taxpayer is relieved 10 the
extent Of Sl6l .000. 900 annually. but
the American consumer is paying for
this relief at the rate of more than
$500. .0O0 900.
Our people imagine that The debt
settlements represent a recognition
abroad Of the moral obligation of
payment, but the fact is that the debt
settlements represent a recognition by
the foreign countries that this formal
ity must be complied with before they
can have access to our money mar
kets. They must have new loans.
therefore they agree to pay the old
debts. But they are not paving, save
as they turn over to our Treasury a
small fraction Of what they take
from our investors.
On balance no debt has been settled:
one of obligation to pay us, no cuun-
try paid. But one hy one the Eu-
Topean nations appreciated the fact
that for their own reconstruction they
must have American capital. The
British perceived that 10 restore the
pound sterling TO par they must make
a debt settlement. There was no vol
untary ana spontaneous rush to settle
anywhere. There was no recognition
nf IllS
ment. No, there was an appreciation
all around of present and future needs
requiring some form Of acknowledge
ment of past obligation.
Europe is getting relatively vast
sums from us annually in return for
paper promises to repay past ohliga-
tions in part and on the basis of very
long time contracts. In a word, just
as Germany has succeeded in escaping
large reparation payments. and in re-
turn for promises To pay comparative
" smaller sums obtained the money
from her conquerorS to rebuild her
economic life, our debtors are getting
US to finance their future.
Borrowings Are Enormous.
What is taking place here and now
Is an enormous transformation. We
are lending from private investors
very large sums Of money to Europe
on condition that Europe promises to
pIY our Treasury small sums annually
for two generations. Thus the debt
of Europe to our government is being
very slightly reduced. but the debt of
Europe to the United States is being
expanded enormously. The interest
on what Italy borrowed from us in
one loan would suffice to pay all of the
debt installmentS for the next five
years at least.
When Congress intervenes and pro-
poses to reject the Italian settlement
what it does in reality is to free Italy
from paying for an advantage Italy
has already enjoyed and the adVan-
tage to obtain which Italy undertook
to pay. If Congress should succeed.
Italy would still have the 500 900. 900
which it borrowed, but our Treasury
would not get the inStallmentS Italy
had contracted to pay.
If the allies, with all their force,
with all their resources. We're unable
TO make Germany pay beyond the
sums Germany was willing to pay for
her own personal reasons, how on
earth can the United States make
Europe pay more for her past borrow
ingS than she is willing to pay for
her own reasons? The allies under
took to Cuercc Germany with their
and abandonment of the entire
method. Ii was more than that, it
was tacit recognition of the fact
that what Germany paid would be de
cided by Germany and he based on
what Germany could get in return,
not upon any war or postwar fact.
Our form of coercion consists in
using the allied need for new loans
10 compel them to agree to fund old
70, Z i n,tS 20
for future payments of past debts we
have been obliged 20 make very great
present loans. We are lending Europe
hundreds of millions and Europe is
paying us tens of millions or the
old account bat solely to get the new
money And in the case of Britain,
' she is finding a way to make us pay
threefold the sum she is paying us.
Ten years hSace, when Europe has