Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-01
LAVAL'S VISIT RELEASES
FLOOD OF DEBT DISCUSSION
Whole Question of Payments Revolves
Around Decisions to Collect and
Resolutions Not to Pay.

not true. The Germans regard repara-
lions as tribute inposed by their con-
querers The allied peoples regard war
debts as tribute TO the United States.
which. to their mind, made huge sums
while Il was still neutral and traded
with all belligerents. europe might
nay IL It were prosperous. at least for a
time and grIfmblingiy, but Europe IS
not prosperous, and for Germany and
Britain recovery viii mean q long pull
Talk about trading war debts for
disarmament Is utterly fallacious be-
cause no nation viii sacrifice self de-
Tense for debt payments and no people
expects to pay war debts anyway. Can
collation. means, in European eyes, only
a return to common sense on the part
Of the United states. It Is one-sided
affair In Europe the American Is
invariably asked everywhere when are
your people going 70 wake up to the
fact?" Confederate money would be
just as useful as allied war debts In
buying armament reduction now.
We can cancel or not cancel. II we
refuse to cancel, whole flock of mora
forums viii follow, but there will be
no more war debt payments nor repa-
rations payments unless there are fur
ther American loans. We can start
the merry go-round again, II we choose,
but the larger our private loans the
less chance Of collecting them On the
other hand, cancellation might fortify
our present loans and IL might lead to
q gradual improvement IN foreign mar
kets. We might profit that way, but
there is no other.
War Cost Billions.
We were dragged into a European
war. That war cost us billions directly
and more billions indirectly In loans to
our associates. At the end of the war
at the peace conference our allies adj
vised us to cancel the loans: we refused.
Three years later Lord Balfour re-
newed the advice in the famous Balfour
note We refused again. A whole
and German payments were regulated by
the Dawes plan and then by the Young
plan.
But the only money ever involved
has been ours. Europe has sat back and
watched us solemnly lending Germany
money and solemnly taking the same
money back from our war associates
It seemed to satisfy US. and 1t did not
trouble them, except the Germans, who
saw us extending our mortgage on his
country. Only the French were realistic
and they took their share of repara-
lions over and above debt payments in
solid things, coal, electrical apparatus,
chemicals, etc.
What is not yet clear to the American
people is that they have been watching
q process Of ghost" payments, q sort
of performance organized by Europe to
humpr the determination not to cancel
debts. The thing only became serious
last Summer when it was a question of
actual European payments, payments
not made with American money. Then
Europe accepted moratorium and bor-
rowed still further from the Federal
Reserve, first to save the German stu
alton and then the British.
Return to Starting Point.
Now. after Is years we are about
probably expended billion Of our own
I'm trying to collect bad debts Europe
owes US today more than 1t did at the
end Of the war, but 1t owes the Gov
eminent q little less and the private
investor a lot more That is all that
has happened, and that is all that ever
win happen. Uncle Sam has always
had the choice between playing the role
Of Uncle Shylock and that Of Santa
Claus so far as war cebts were con-
cerned. But while Santa Claus may
collect thanks, Shylock is not going to
get money. and even the thanks will not
be overenthusiastic, because Europe has
already spent the money and never be-
lieved 1t ought to be asked to pay.
In sum. however, what counts is that
dozen years of effort to collect the
war debts has cost the American people
billion dollars and the war debts,
plus the billion, still remain to be COL
| lected. The truth, hurniliating as it
may be, is that in the whole question
of war debts Europe has taken us for
\ a ride" at our own exuense II has
made us pay new price for the luxury
of refusing to cancel a bad debt. 1t
| has literally made money out of what
/ 1t owed us because we were credulous
enough to believe that We could collect
/ it-and the end is not yet in sight.