New Britain herald., 1926-05-20
MELLON SAYS FRENCH TERMS ARE VERY FAIR
Just to American Taxpay ers-Represents Ca
 pacity to Pay"

Washington, May % LP'-Thc
 French debt settlement was de- scribed today by Secretary Mellon to the house ways and means commit tee as flair both 10 the American taxpayer and to the French people" l. represents Frances capacity to pay, Mir, Mellon said, and he pre- dictod that when France has con- cluded debt settlements with Eng land as well as this country it will he able 10 stabilize is currency
 which has declined considerably in recent weeks.
 The appearance of the secretary. who was accomplished by Floyd Blair, acting secretary Of the debt commission before the committee
 today marked the first step in the , legislative consideration Of the . Frcnch-Jugo Slavian debt pacts. which the administration hopes to have approved by congress at this session.
 Mr. Mellon pointed out that the settlement provides for total pay mcnts by France Of $6,54IG74102 over a period Of e years on it's or iginal loan from this country Of $3.34o, o,00oo,oo0 with payments start ing at s30,oONO00 and graduating Up to $125,000,00o annually, which will be paid for the last 45 years.
 ITO insist on too heavy payments in the early years" the secretary de- Clarcd. might well jeopardize ac- complishment Of those reforms es- sential to Frances economic and financial rehabilitation.
 France at present is not able 10 set apart large sums to be trans fcrred abroad as payments on ac- count of her external debts. Despite great efforts, she has not yet fully repaired the losses in man power and property caused by the war. Her domestic debt has reached enormous proportions, her currency is infat- ed and its becoming increasingly difficult to raise by taxation sulfi- cient funds to meet the charges Of her debt and 10 pay her original government expenditures. Subjec; to the ill-effects of a fluctuating cur rency, she has been making every effort to balance her budget"
 The present value of the French payments on 4 1-4 per cent basis is $2,00S,122,624 or about 50 per cent Of the debt funded, Mir. Mellon said, as compared with the Italian settlement of 2G per cent, while the money loaned 10 France was obtain ed by the treasury at 1-f per cent. This government is now getting money al almost 3 per cent, he de- clared, and on this basis. the French settlement virtually represents dol lar for dollar in present value,
 Comparing the settlement with those negotiated with other govern ments. the secretary said it called for an annual average payment by France equivalent to I:S3 per cent of it's total budget expenditures. The British settlement amounted to 4.6 per cent of it's budget, the Italian settlement 5.17 per cent and the Belgium settlement 3.5 per cent,
 Comparing the present value of the settlements with the sum Of the total budget, the total foreign trade and the total national income for year of each Of these countries, he said the burden of the French set clement represents 15 per cent. The British 11.7 per cent. The Belgian government per cent. and the Italian 5.59 per cent.
 MT. Mellon explained terms of the Jugo Slavian debt settlement Of $62, ,S500OO, which he said also was based on the capacity of that coun- try to pay The settlement provides for total payments over the 62-year period of $95,17T,635.