Evening star., 1932-07-03
POLITICAL DEBTS
REACH BIG TOTAL
Europe Now Owes More Than
ID BiIlionS-Figures
AnaIyzed.
BY DIR. MAX wINKLER.
Special Dispatch to The Star.

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Special Dispatch to The Star.
NEW YORK, July 2.-Capitalized at
3 per cent. the so-caIled political debts
of the various European countries ag-
gregate $I4,125, ,0o0. 900. This amount
includes Russias political indebtedness
OF about s425O 600 900, for the repay
ment of which no provision has yet
been made. the Soviet having repudiat-
ed all obligations contracted by the
CzariSt government. Ru-sia'S repudia-
tion applies to commercial as we'll as
political debts.
II Germans payments as fixed bv
the Young plan. are added. the total
political debt of the world reaches the
impressive figure of more than $24 ,000.-
100000, or materially in excess of dou-
bic the total available supply of gold,
the only commodity in which most
creditor nations wish to be paid. The
fallacy Of such insiStence is apparent.
Britain Chief Debtor.
Great Britain heads the list, with a
total political Indebtedness of S4250,-
100000 If the country were to repay
this debt ir terms of rubber, a COM
modify whose market is controlled
Jointly by England and Holland she
would, on the basis of current levels,
have to pay more than 10 times as
much as she would have paid on the
basis of quotations for rubber obtaining
in March, 1928, when the war debt Of
the country was funded
This method of computing intergov-
ernmental debt payments conveys. in
the writer's opinion, much more con-
else idea than the reduction of such
payments to per capita basis.
France ranks next with a total of
about $4,000 100000. If the nations
political debt were expressed in terms
of silk. an important item in Frances
economic structure, payments would
aggregate about five and one-half times
as much on the basis Of todays levels
as on the basis of prices prevailing at
the time the French debt was funded
Italy is third with $875 900, 900. Due
to the relatively restricted resources OF
the nation and the greatly reduced
national income, despite rigid econ
omies. payments by Italy on account
of political debts constitute an almost
unbearable burden upon the kingdom S
treasury.
Eliminating Russia, Germany's rep
arations debt is almost twice as large
as the political debts of all the nations
com5ined In other words. the present
capital value of the Reichs political
commitments is approximately 100000
100000, although the total to be paid
by Germany, according to the Young
plan, is about SIS, 400 100000, while the
political debts of the other European
countries amount. If capitalized at 5
per cent. to IS, ,625 ,000, 900.
Difficulty in Payment.
Adding the sums which Germany is
20 pay, according to the Young plan,
to the total payable in accordance with
the terms of the various debt funding
agreements, one obtains the staggering
sum of s37, 500 900 900, equivalent to the
total net value of industrial production
of the United States, Great Britain and
Germany for 1929. admittedly a year
of marked prosperity.
Is it not apparent, that in the light
of the demands upon debtor countries.
payment on account of political obli-
cations is possible only in the imagina-
ton of the most confirmed optimist?
Does the world seriously believe that
repayment in full Is even remotely
possible? Is it not within reason to
state that elimination of the political
debt problem for, at least. reasonable
period OF time will have a profound
EIEeCL uUOll bllC+ AQtlu 1AA0
make possible, through the restoration
of confidence OF nations in themselves
and in their neighbors, revival OF
business and return of conditions
more nearly resembling normality?
Lausanne may provide the answer to
the above questions, although news
emanating from the conference is not
especially encouraging Credible re-
ports are to the effect that an equitable
agreement is not expected to be reached
and that another session already is be-
ing discussed, to be held after the
American elections in November.
Nothing would seem more dangerous
TO the economic structure of the world
than to delay action. The powers as
sembled at Lausanne doubtless realize
this. They are not likely to permit
petty nationalism to becloud the main
issue They are fully cognizant of the
urgency of the problem, realizing that
in the event of failure to reach an
agreement the wrold may ito use the
opinion of the Midland Bank expect
with a degree of confidence not often
felt in economic prophecy, wholesale
defaults from which countries will
emerge, at the cost Of Il-distributed
sacrifices, with economic capacities dis
proportionately impaired"
Regardless OF adverse news from
Switzerland, the writer is of the opin-
ion tan opinion substsntiated by the
satisfactory action of the various Euro
pean markets and the continued rise of
European leans in the American mar
ket) that constructive forces are at
work and that the probability Of a sat
isfactory agreement being reached is
greater than the possibility of Lausanne
being failure. Should the assumption
be correct. the adoption of an optimistic
attitude toward the future would seem
fully justified
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Newspaper Alliance, Inc)