Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-03-12
BACKGROUND OF EVENTS
BY PAUL Y. COLLINS.

produce the means 10 pay tho bonds or
the American taxpayer must. The
Government is only the friendly In.
dorser." The money loaned did not
come out of a Treasury surplus, but
out OF the sale of Liberty bonds. as
provided by act of Congress. and the
credit Of the Government is pledged
to pay those bonds.
The professors, through DIR. Hib-
ben, soothe the Debt Commission
feelings, and save it's face, by explain.
ing that however well intentioned
may have been the motives of our
representatives" - Mellon. Hughes,
Hoover. Kellogg, Smoot ct al.-'and
however lenient these terms may be
represented to be there is a
growing recognition that the settle
ments so far affected do not meet
the actual situation"
Then the premiers and ambassadors
of the debtor nations were as incom-
petent as our own statesmen. else they
might have shown more iirmness in
refusing to pay their signed obliga.
tons, by which all but $242 900 900 OF
the $12 ,036, 1915 900 have been funded,
to be paid on the installment plan over
a period OF Sc years.
Senator Smoot explains that the
term 81 years was fixed by first as
certaining the financial capacity Of
England TO pay so much a year, which
annual sum would require 81 years
TO pay out; then all other nations were
given 81 years. and their annual pay.
mentS were adjusted according to
what they could reasonably meet--a
certain percentage of their gross reve-
nues and commerce-each year; the
balance was Cancelled. Practically all
the loans made during the war were
nom cd 4. Lee
represents postwar loans. II leaves
only half of the original gross amount
yet to be paid-over a 62-year install
ment plan. Originally the foreign bor-
rowers were to pay the same rate of
interest that our Liberty bonds re-
quired. Our Liberty bonds bear Az per
cent interest. Certain bonds will be
called in and new loans bearing az
per cent interest will be substituted
That is as low an interest rate On
which the United States Treasury,
with credit unparalleled in the world,
can hope to obtain money. Yet in the
Mellon-Berenger funding settlement of
the French debt of $4,025, 0O0, 900, we
give France an interest rate of 1.641
per cent-a little over ia per cent,
while we pay 3I2 for the money in
vested in that French debt. UncIo
Shylock does that. Mr.. Professor.
y + 81
While the negotiations were in
process in 1917 to make this loan
even while the fate of France was
trembling on the brink of defeat-the
American Ambassador to France ca
Dled to our State Department:
The French premier expressed TO
me the hope that no resolution would
be introduced or debated in Congress
tending to make a gift to France
from the United States, however much
the sentiment of good will prompting
II might be appreciated by the French
people,"
That premier was the "old TIGER
Clemenceau. Proud, self-respecting
France! Jealous of her permanent
credit-in 1917.
While the negotiations for the
French loan were in process, the
French Ambassador asked Secretary
McAdoo If he would consent to a loan
for 10 years. He agreed to Is years.
Then the premier asked for % years:
granted. Later the premier raised 1t
to 80 years; granted. Now the Mellon.
Berenger funding settlement-await.
ing French ratification-grants 81
years.
In the peace negotiations Q919) the
United States Treasury had occasion
to warn France in a note addressed 10
the deputy high commissioner in
washington, expressing surprise to
read that. at a meeting OF the financial
drafting committee appointed by the
council OF 10, representatives of
France had favored discussing a plan
to pool all war debts" and the note
stated that ''the United States Treas
ury could not go on making loans to
any government which is lending sup
port to any plan which would create
uncertainty as to due repayment"
The reply assured the United States
that the French government had
never given the slightest support to
any such idea but that was in 1879
After that, we loaned France $780,
000. 900.
In actual proportion to our wealth
we spent more on the war than all
the allies combined, though 1t was not
our war to begin with. This state
ment is on the authority OF Harvey
L. Fisk. eminent statistician. He
says that the United States national
wealth was four-tenths that of all
the countries fighting Germany, but
we spent in the war five-tenths of the
cost of the war. On the basis OF equal
in proportion of wealth
we are entitled TO refund Of $1,000
600 900, besides collection of all loans.
Yet we accepted no part OF the loot
OF victory.
Downright. 1927. By Paul v. coninai