Evening star., 1931-11-29
DEBT SETTLEMENT
IS MAJOR PROBLEM
|. OF WORLD FINANCE
Adjustment of German 0bIi-
cations Held Necessary to
Economic Recovery.
U. S. is NET CREDITOR
IN PREPARATIONS SET-UP
Total of $27, 800, ,ooo,O 900 Is Still
Owing to Allied Coun-
tries.
BY DIR. MAX WINKLER.

Special Dispatch to The Star.
NEW YORK, November 28-It is
becoming increasingly evident that Ger
many constitutes the crux of the entire
international financial and economic
situation. An adjustment of German
debt problems, involving both political
and commercial obligations, is a pre-
requisite to economic rehabilitation, not
alone of Europe, but of the world.
Two committees have been named to
investigate these questions with q view
to determining the capacity Of the
Reich to adhere to the provisions of the
various loan contracts. Should it be
found desirable or necessary to reduce
German reparationS payments, the
affected creditors would in all likelihood
insist upon a corresponding reduction
in their debts to the United States.
Analysis of the entire problem per-
| tanning to reparations and inter-
government debts reveals that Germany
is the net debtor and the United States
the net creditor.
Partition of PAYMENTS.
On the basis of the provisions of the
Young plan and the funding arrange
| mentS between the various allied powers
and the United States, the following
payments are scheduled to be made
Germany, as matters stand at present,
| will pay total of about 27,500 ,O0O, 900.
France is scheduled to receive a total
Of s14,500, ,000,0 900. Her payments to her
creditors aggregate $40, 800 900 900, leav-
ing a net balance Of $3,7oo,0 ,000,0
Great Britain will receive $10,800,-
900, 900, and will pay out SIC, ,000, 600, 900,
retaining 100000, 900.
1taly's receipts total $4,100, ,e00, 900;
| her payments to creditors absorb about
$3,900,0 100000, leaving a net balance OF
$500, 900 ,000
The other powers, including Poland
Rumania, JugoSlavia and CzechoSlovakia,
are scheduled to receive $4,000, ,000, 900,
and to pay out about $2,100, ,000, 900,
thus retaining $1,700, 100000
| The United States will receive a total
OF about $22,000,000, 900, provided, of
course, payments are made in accord
ance with the various plans which have
so far been devised.
Transfer Problem.
It has been maintained that the total
payment due the United States repre-
| Sents only a small percentage of the
budgets of the respective debtors and
| that very much larger sums are ex-
pended in connection with the mainte-
While one does not advocate the
! spending or rather the waste, Of large
| sums on armies and navieS, such ex-
| penditure, it must be admitted, Is the
| unfortunate but inevitable by-product
| of modern civilization. It should also
| be remembered, however, that such ex-
penditure is made almost exclusively at
home. while payments on account Of
foreign debts are to be transferred
! abroad.
The significance of the transfer prob
lem is obvious, not alone to economists,
but to all those Americans, individuals
| as well as institutions, who own foreign
securities of various categorieS, with re-
| Spect to which they are being called
upon rather frequently to forego pay
| ments.
1t is also being held that suspension
| OF payments on account of intergov-
ernmental debts and reparations would
affect the nations as a whole, whereas
| default with regard to commercial debts
| will affect only a certain number of
people who hold foreign securities and
who are doubtless in the minority.
Foreign Investment"
In this connection it should be point
ed out that fhe term foreign invest
ment' is distinctly misnomer, and
that because Of the pronounced eco
| nomic interdependence it Is difficult, If
| not impossible, to segregate the So
| called domestic investment from the So
called foreign.
If, as some maintain, it is ethically
wrong to deprive coming generations in
the United States of what justly be-
longs to them. is it not, by the same
process Of reasoning, equally wrong to
levy taxes on coming generations else
| where and call upon them to discharge
| a debt which their ancestors are ac-
cused of having contracted?"
Copyright, 1881, by the North American
Newspaper Alliance, 1nc)