The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-04-05
A New War Debts Deal Looms

The chances are better than fair that in less than
two years Europe will seek to settle her $115OOO00O0O
war debts to the United States for approximately their
present cash value.
For two or three years forces have been in motion
to bring about general reparations and war debts
liquidation conference, at which something like the
following steps would be taken:
l. Fix the total amount Germany is to pay France
Britain and the rest of the allies by way/of repara
tons
O. Arrange for the sale Of German bonds partly
secured by her railroads and industries in the world
market
3. Use these bonds or the proceeds therefrom,
first to pay reparations to the allies and second to
pay the allied debt to the United States a cash
down basis.
Heretofore France has been the principal European
obstacle to this plan. But Sunday, at Carcassonne
Premier Poincare gave it his benedicton, at least in
principle so today in Paris London Berlin and Wash
ington statesmen are openly discussing the possibility
of a new debts deal
With the exception of France, most of the debtor
nations have negotiated and ratified debt funding
agreements with the United States There is an
agreement with France, but it has not been ratified
But in each instance interest rates reduced until
the present cash value Of the total is anywhere from
80 to 65 per cent below face value
For instance Britain has agreed to pay $4600000,-
600 over a. period of sixty-tWo years. But, thanks
to the low interest it is estimated that the present
cash value of the debt to the United States is only
So 100000 Similarly, Frances $4000000000 debt
is worth less than $2000000000 And so on, the total
of more than $11 OOOOOOOOO being worth scarcely
$4,000 OOOO-a figure which the German bonds
more than cover.
Eight billion dollars often has been suggested as
minimum figure for German separations, but France
hardly would agree to that. The little more than
"a 600 100000 which she would receive her share
barely would pay her debts to the United States and
Britain and then there are her devastated regions to
think Of
AS for Germany, she probably would complain at
even the $8OOOOOOOOO. But next year, under the
Dawes plan she must begin paying more than $780,
100000 annually to the allies and that represents
per cent on 12000OO0,o0O.
Thus if she could settle for even ten billions cash.
she would be big winner, especially if by so doing
she definitely fixed the total amount payable. AS
things now stand she is doomed to on paying this
per cent on 600 900 forever, until the allies
yelieve the load.
But suppose Germany sells eight or ten billion
dollars worth of bonds to pay the allies who in turn
pay us; where is the money to come from? The
United States principally of course. Thus the Amer
lean public would be paying itself the money which
Europe owes.
The deal, if it goes through, would make the
United States Germany's principal creditor instead
of France England and the rest Tt is therefore not
the kind of plan for to initiate But if Germany
and the rest insist it, and really want it, 1t might
not be bad business for, after ALL we would be swap
ping ticklsh uncertainty for something at least a
bit less uncertain.
For nobody believes for a moment that Europe is
going to pay us the $221430OOOOO which the present
agreements represent in principal and interest over
period of sxty-two years.