The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-09-21
KEEPING UP
With
THE NE WIS
BY LUDWELL DENNY

VA @NoAA3ANC LIN 0SpJ' 1A.-A1A~
w other European drive for
cancellation of war debts is around
the corner, and the administration
here is getting ready to head it off.
Europe could not possibly have
found a worse time, so far as the
United States Government is con-
cerned, for starting the old argu-
ment over again. For this being
campaign Year and every RepuBS
lican official of Importance is de-
termined to shun any talk to the
United States Treasury Of reducing
the debts of European countries.
With Al Smith campaigning ef-
fectively in the revolving farm belt
Of the Middle West, the farm is
sue has been pulled out of the back
ground where it has rested for the
last three months and made a po-
tential election danger for the Re-
publicans.
There is a direct connection be-
tween this farm campaign situa-
ton and war debts. Every major
farm relief proposal now under dis7d
cussion would involve in the long
run large Expenditures by the Fed
eral Government. The farmers
therefore are opposed to any policy
of forgiving the European govern
ments their debts, which would
leave the United States Treasury
less able in the future to give farm
aid
Moreover the farmers still are
very angry over the postwar de-
flation, which was carried out all
legedly at their expense. To their
way Of thinking any further lift
ing by this Government of the cost
of the war from the shoulders OF
Europe would mean in effect putting
it on the back Of American farmers.
II
THIS may or may not be an ade-
4 quate economic theory, but it is
the way a vast number Of voters in
the Middle West feel about it.
Reduction or virtual cancellation Of
war debts is injected into interna-
tional debate no was a roundabout
result of European internal politics,
and the necessity of the German
government to strive for French
evacuation Of the Rhineland and for
flXation of the total amount of
PREPARATIONS.
All Of this is complicated by the
recent Franco-British military and
naval agreement-or what its enc
mics call an alliance. That agree
ment, in addition to cutting under
the entire American naval policy
and type of cruiser limitation, is
understood TO involve British sup
port for French CONSUMPTION and
virtual military hegemony of Europe.
This arouses sharp German re-
sentiment because any Franco Brit
ish alliance" would seem to destroy
the Locarno security pacts under
which Britain was to act as a kind
Of neutral policeman, going to the
aid Of France or Of Germany in case
either were the aggressor against
the other.
1t also stimulated the alrea6nz
great German desire to get all for
eign troops out Of her territory. A
German government which fails to
make Roadway in that direction will
soon fail.
EURTHER complicating the situ-
II alton is Germany's desire and
acute need for a revision of the
Dawes plan and fiXation of a def
mite total of the amount of repara-
ton which she must pay the allies.
Here enters the war debt ques-
ton. For France insists on link
ing all these issues together in such
a way that the United States is
the key to settlement.
France, that is, will not withdraw
from the Rhineland unless she Is
paid to do so, and unless she is as
sured of continuing to get large
scale reparation payments from
Germany.
The only way in which France
can get more cash out Of repara-
tons now is through so-called COM
liberalization of the German rail-
road bonds. And the only way to
sell those bonds, amounting to
about $4,000, 100000, is to float most
of them on the New York market.
This means in effect that Ameri-
cans, through purchase Of paper,
would pay cash to Germany to pay
the allies.
Moreover, France is not willing
to fix the total which Germany pays
her in reparations until the United
States reduces further the debt
amount France pays the United
States. For this reason France has
never ratified the Franco American
debt funding agreement.
The Washington Government re-
fuses now, as it has always done,
to recognize that reparations and
American debts are interdependent.
Nevertheless, most economists 80
sist that the United States will have
to swallow the bitter dose of debt
cancellation in the end.
The result of such action would
be to increase the war BURDEN Of
the American taxpayer to permit
more rapid political and economic
recovery of Europe. Also by cam
ceiling French and other allied bonds
held by the United States Govern
ment, the value of French and al
lied bonds held by private Ameri-
rarn ha,nl-ea and citiznne r,,n11ld h