The Waterbury Democrat., 1932-11-19
DR FARCHILD
 OF YALE OFFERS
 WAR DEBT PLAN
Policy of This Nation / Should Be Determined By Altitude of Europe Towards Armament Ex- penditures
fBx Special Permissionl

NGW l1dVCAAp V SVAAAAb ANS' GNSl-The policy of the United States on debt payments now due from Great Britain and other European countries should be- de- termined by the attitude of those countries toward their expendf- lures at home for armaments. in the opinion of Dr Fred R. Fair child, Yale professor of political economy, and noted authority on problems of international finance and taxation.
 He suggested an agreement be- tween this nation and her foreign debtors greatly reducing the sum total of debt which would be made payable in. a comparatively few years by bond issues.
 In an exclusive interview Dr Fairchild pointed out that Tor foreign powers to tell the United States that they cannot raise the money with which to meet their payments to this country while they are spending several times the amount of these payments at home for the maintenance and in- crease of armaments is like an tn- divfdual telling his grocer he can not pay ten dollars he owes him and then spending $150 on a party or other luxury.
 '.In the year ending June 30. 1882, one hundred sixty. million dollars was due the United states from eat Britain" said Dr Far child out the British budget for that year contained in round num- bers 53O million dollars for army, navy and air forces, being consid- t,pv [ finnnG inc amount of her debt payment. France, owing us 50 millions dol- lars this year, had nine times as. much--45O millions--in her war budget. Italy's military budget for 193O-31 of 22O millions is more than fourteen times the IS millions she should have paid the United states in the fiscal year 1882. Ger tainly American has no interest in making it easier for Europe to set the stage for the next war. in which war America would doubt less find herself involved as in the lagt."
 tions, Dr Fairchild said, he finds no clear cut answer to the war debt problem but that it appears that the United States should stand upon it's rights until European debtor countries demonstrate willingness to put their own houses in good order by more drastic armament reductions than they have been willing to make up to the present.
 The American government. Fair child said, should know definitely whether or not the conditions which make 1t impossible for the debtor nations to meet their pres ent obligations are permanent or if they are due to temporary con- ditions which can be expected to pass within the next year or two, before granting any extension of time. Dr Fairchild opposes an ex- tension of the moratorium of year ago on a similar basis which would rediyide the payments now due over period of years, but sees no reason why the United States should not be willing to wait a reasonable time for the payment of the present installments if the debtor nations can give any assur- ance that they will be in a position to make their payments at q date in the near future.
 He emphatically opposes the present arrangement for the pay ment of the debts over a long per- iod of time on the ground that they are a constant source of interna- tional irritation and that they can reasonably be expected to become more so as time goes on and they are being paid by a generation which was not yet born at the time of the World war.
 Instead Dr Fairchild advocates nn agreement between the United States and the debtor countries url- der which the total amount of the debt would be greatly reduced and the reduced principal paid in single sum within the next few years. Under Dr Fairchild's plan European powers would raise the funds for this single payment through issuance of bonds as France Gad at the end of the Franco Prussian war. This he points out would change the situ- ation so that instead of being q question for constant international pickering it would be a business transaction between the various governmentsAand the bond holders. He would make reduction of arnl- ament expenditures a condition of the reduction of the principal.
 Asked about the effect of this on tho American tax rate, pr Fair child said that any reduction in armament expenditures by Euro f,ean nations would tend to reduce taxes in the United States by en. abiing this country to reduce its own expenditures for army and navy.