Evening star., 1927-04-24
SURPLUS Of j. S.
! INTERESTS EUROPE
Greater Debt Indulgence Is
+! Hoped For as Result of
Budget Excess.
BY GERVILLE REACHE.

Hy Radio to The Star.
PARIS, April 23.-Europe observes
with interest Americas increasing
budget surplus, which this year ap-
parently will reach $500 100000. Add
ed to the sinking fund and foreign
debt receipts it will total 81, 200, ,000,0 900
toward reduction of the public debt.
Europe's interest is based upon the
hope that such prosperity will incline
the United States toward greater in
dulgenCe to foreign debtors.
The French newspapers have pub
1ished numerous recent American
documents concerning the debt ques-
ton, notably the manifesto of the
Princeton faculty and Secretary Mel.
Ions reply TO President John Grier
Hibben, as well as the Counter-replies
of DR. Hibben and Prof. Seligman of
Columbia and American editorial COM
ments.
Preparations Loss Ignored.
No commentaries, however, have
been published in France since the
Quai d'Orsay has requested the press
not to interfere in a controversy which
the writer is in a position to outline
Frances attitude.
Among the various arguments ad.
duced, one deserves special attention.
Secretary Mellon stated that the
principal debtors were receiving
from Germany sums more than suff1-
CIent to pay America. He did not men.
ton that the debtors received the
German payments in kind or in marks
and that conversion into dollars rep
resents loss of Is to 90 per cent.
Prof Seligman dealt with this
statement by pointing out that the
sums paid by Germany do not con-
stitute fund available for reimburs-
ing America without calling on
French taxpayers. These sums, he
declared, justly already have been
hypothecated.
French opinion on this account was
deeply wounded at statements that
the money which Europe is not pay
Ing the United States is going for
ornaments. Two figures demolish
this argument.
Figures Cited i'm RefutatiOn.
French naval and military expendf-
lures for 1923 totaled $3.50, 900 900.
whereas this year they amounted 20
only S266000,000 despite higher prices
and Frances new international obli-
cations in Morocco, Syria, and other
places.
On the other hand, the public debt
service. which in 1913 cost $3.50, ,000,-
600, today costs $s60,000,00 That
represents the cost of the war and
German devastation, which the repa-
rations payments will never half pay,
even If Germany continues to exc
cute the Dawes plan.
This crushing debt rests on
country which has been impov-
erished by at least S25 ,000, ,000, 900
in capital, or a third of it's national
wealth. And France today continues
impovershing herself and living on
her capital. The recent extraor-
dinary financial recovery is in reality
nothing but another occult, though
voluntary. capital levy, aggravated
by new treasury loans at sight. Many
financiers believe it will be impossi-
BILE for France to balance her budget
several years running with such a
heavy public debt.
Franc Sterilization Inflated.
Sterilization of the franc at the
present rate is a chimera momen-
tarily made possible by repatriation
OF previously exported capital and
alienation of part of the national
patrimony, thus placing the treasury
In temporarily brilliant situation It
the expense of the national economy.
Calculation of inter- governmental
debts in present value" is a financial
fiction which may amuse the experts,
but 1T is certain that neither France
nor England can completely pay it's
foreign debts which soon will exceed
their annual budget capacity with
out running internal bondholders as
Germany did.
Acknowledging the debts is another
matter. but the American professors
are right-some day they must be
revised.
(CopyriEht 1927