Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-06
DEBT FLARE SEEN
AT c. OF C. SESSION
British Expected to Ask Re-
assessing of Nations
Capacity to Pay.

A fiare-up is foreseen on the inter-
national debt question before this ses-
sion of the Internatio Chambers OF
Commerce adtourns Saturday night.
Unless present plans change, 1t Will
come in the form of a resolution by the
British delegation demanding an expert
commission. to reasSeSs the capacity OIL
debtor nations to pay on a basis OF
commodity values. The Russian ques-
tion is to be submerged IN favor OF TINS
drive manifestly intended to inhuence
American public opinion on the dept
question, the leverage used being the
present world economic depression.
incidentally, the British delegation
does not stand alone behind TINS reSo-
luton. 1t has been the suplest on IT. re.
UIer,t nrivate conversations between the
dekepations of France, italy ana Ger
many. France and italy are behino ~
and the Germans, remembering amer
lean differentiation between reoaraIlons
and debts, may be said to be neutral.
American Hands on"
In the meantime, the Americans are
doing nothing whatever 70 lnnuence tne
foreign delegations The reason 1or tnls
"hands- off" policy may be prleny
stated as follows
The foreign delegations attending
The meeting of the International Chan-
her of Commerce do not speak Ine
language of their own governments Oh
the debt question. At least, up 70 t1 ~
time no foreign government mas ON.
cially talked to this Government ABOUT
the necessity of debt cancellations re-
auctions, or moratoriums, OF IulUi ne.
investigations of capacity TO pay. Oh
the contrary, Philip Snowden, chan
cellor of the Exchequer of Great Brit,
ain. has publicly and repeatedly salo
that Great Britain will never ask q
change In its debt-paying policy 10 TINS
GoveTnment Since the delegates nave
failed to convince their own govern
ments, the question Is being asked mere
lust what practical value the conIereeS
expect to attain by agitation on ne"
line at this time. -.
chamber of Commerce meeting in Rome
IN 1928 set in motion plan FOR the
onnointment of debt experts, which
Fnallv eliminated in the Dawes Com
r1ission. It must be remembered. how
ever. that Secretary Of States Charles
F Hughes had previously suggested
this method of approach to the vexing
question Of reparations rather than
debts and that the minds OF all gov
ernments at that time were nearly as
one on this subject.
Question Of Moratorium.
Under the existing debt agreement
With Great Britain, that government
ran at any time intimate to the United
states the necessity Of moratorium for
reasons which must of necessity be per-
suasive Those reasons would Win
equal necessity. be translated to the
American people so that they might
understand the actions OF their own
Government.
with respect to cancellation Of Euro
mean debts to the United States at this
time, the following would be the logical
outcome:
Under the terms Of the Balfour note,
Great Britain is collecting from Europe
today $4,000 0l0 spnually, which 1t
paws to the United States on It's own
debt. Great Britain is pledged TO re-
turn this money to Europe II Its debt
to the United States is ever Cancelled.
Under the terms of the reparations
agreement, 40 per cent of this amount
would go to Germany, and the bulk Of
the balance to France and Italy. No
nation in Europe Is bound TO cancel
any more of Germany's reparation pay
ments than 40 per cent. while the
United States Is asked to remit the pay
ment Of 100 per cent Of Europe's debt
to It.
One Proper Approach.
Under this set-up, thereto -. the
question readily arises, who would be
paying Germany's debts?
The only proper approach to a debt
cancellation arrangement. according to
the view held in many quarters In this
country, would be 100 per cent cancel
lation all around Nobody has evel
made such suggestion and probably
never will, for the simple reason that
Germany would then pay no reparationt
at all
While the British have not yet made
an open argument in favor Of their
tentative resolution TO ressseSs the ca
pacity of debtor nations to pay on the
basis Of commodity values, 1t must be
obvious even to the layman, that this
is such flexible basis as to be almost
II not entirely, unavoidable in practice
How would such plan have worked
during the lest two years, when COM
modify values dropped to the Lowest
point in recent economic history and
how could such a plan be made to work
when those commodity values again re-
turn TO normality2 SO far as govern
ment budgets and government financing
are concerned, no government coulc
know from year to year what 1t could
expect from such flexible machine.
In all proba bility the proposed In
veStigating committee would have
trouble in making a report that would
be in keeping with the facts when con-
sidered.
(Copyright, 1871
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