Evening star., 1927-05-05

our debtor nations. I pointed out
that the dollars with which goods and
services were purchased in this coun-
try were furnished to our associates
on credit, whereas the pounds with
which we purchased goods and serv
ices in Great Britain were paid for
in cash. L then went on to say:
"Tn other words, we paid cash for
the goods and services necessary to
enable us to make our joint contribu-
tion TO the common cause. Our asso-
ciates got the goods and services pur
chased in this country necessary to
enable them to make that part of
their joint contribution on credit.
Here is the fundamental reason which
explains why we ended the war with
every one owing us and our owing
no one. We are now urged to cancel
these debts, because it is alleged that
they were incurred in a common
cause, but neither abroad nor in this
country has 1t been suggested that II
this is to be done we are to be re-
imbursed the dollars actually expend-
ed by us in France and Great Britain
so that the goods and services they
sold us might constitute their con.
tribution to the common cause
Statement Not Denied.
This the British government does
not deny; that we paid cash for goods
and services obtained in Great Brit
ain and that for the most part they
received goods and services in this
country on credit but they say this
is misleading because they used the
dollars purchased by us in Great Brit
ain for further purchases in this
country. The point seems to me i'm
material. The dollars they received
from the American government in
creased their available cash resources,
while the promissory notes we re-
ceived did not increase our available
cash resources.
For the purchases made by Great
Britain in the United States dollars
were furnished by the American Gov
ernment by borrowing from its own
citizens, the British government Civ
ing its obligations to the American
Government for the equivalent. For
purchases made by the American Gov
ernment in Great Britain the United
States Government did not borrow
pounds from the British government
and give it's obligation to the British
government, but borrowed dollars
from its own citizens with which to
purchase the pounds and actually paid
cash to Great Britain. Had the
transactions been identical in form
the British government would now
hold obligations Of the American Gov
ernment to cover purchases made in
Great Britain, just as the American
Government holds obligations of the
British government for purchases
made in America, and obviously can
collation. could not be urged on a one.
sided basis.
"The fact that the cash employed
in purchasing pounds was borrowed
from American citizens and not from
the British government is the dis
tinguishing difference and any pro-
gram of cancellation which does not
allow for this difference gives the
United States no credit on the
amount of it's war debt for purchases
made in Great Britain and other
countries.
ReparatiOns Only Incidental.
'The British note refers to the
statement in my letter to President
Hibben that all our principal debtors
are already receiving from Germany
more than enough to pay their debts
to the United States The Princeton
and Columbia professors had stated
that we do not desire to impose
tremendous burdens of taxation for
the next two generations on friendly
countries My letter pointed out
that in reaching the debt settlements
based on the debtors capacity to
pay. only incidental consideration was
given to the reparation payments to
be received by the debtor countries
from Germany. In other words,
pointed out that we endeavored to
make settlements which the debtors