The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-06
FUNDED DEBT
OF WAR TODAY
is II BILLIONS
Principal and Interest, to Be
Repaid in 81 Years,
Past q Billions.
This is the second Of an authoritative
series on the war debt situation.
BY WILLIAM PHILIP SIMAdS
Scripps-Howard Foreign Editor


Scripps-Howard Foreign Editor
WASHINGTON, Dec. 6.-They
say figures don't lie. That was be-
fore the war debts.
Depending upon the kind Of an
swer you want you can figure Uncle
Sam the coldest-blooded Shylock in
history or the prize big-hearted boob
of all time.
The simple facts about the war
debts, however, are these:
Up to April 6, 1917, when the
United States entered the war,
Great Britain was banker to the
allies. OF the inter-allied borrow
ings up TO that date, amounting to
$4,000 100000, some $4,000, 100000
had been loaned by her.
u. S. Becomes Banker "a
Then Uncle Sam became the
banker. Britain and the rest were
practically broke. Pounds sterling,
francs and lire were ready to hit
the toboggan. Between April, 1917,
and November, 1920 he loaned S10,-
338,000000 to twenty different ma
tions-Britain, France, Italy, Bel
GUM and Russia getting the lions
share.
These loans were made under the
four Liberty loan acts in April and
September, 1917, ami April and July,
19l0-and under a series Of later
acts for war supplies, relief, etc.
OF the more than ten billions
loaned, $2,62700O, 900 has been re-
paid, mostly by Britain She has
paid back $1,912,0OO,OO France,
$48600O,OOO; Italy, $9a000,OO, and
all others combined, $132,OOO,OOO.
Nevertheless, the war debt is big
ger today than it was ten years ago,
because of accumulated interest.
Today it amounts to $11 0,000,-
600. That is what is called the
funded debt. 1t is to be repaid dur
ing the next sixty-two years and
will total, principal and interest, no
less than $22,26O,00O,00
Started in 1922
The debt funding agreements
we're negotiated by the World war
foreign debt commission, authorized
by congress. 1t began to function
in 1922 and ceased in 1927. Andrew
w. Mellon, then secretary of the
treasury, was chairman and Presi-
dent Hoover, then secretary of COM
merce, was member.
Of the $9,610,00O,000 advanced
under the Liberty loans, $7O77, 0O0,-
600 was before the armistice, and
1888, 100000 was after the arnis-
tice. Another $728,OO0,OOO was adj
vanced under authorization after
the armistice, making a total post
war loan of $3,261, 100000.
But Europe received little actual
gold. What she got was credits. She
bought goods from Americans and
referred then to Uncle Sam for their
money. The money, for the most
part, remained in the United
States.
These are factual highlghts.
Here is some of the fiction.
Debts Not Cancelled
1t Is said that the war debt has
been Cancelled largely. Strictly
speaking that is not true. Only the
interest has been reduced. When
the loans were made, Britain and
the rest gave ordinary commercial
notes bearing per cent interest.
When the debts were funded, the
commission reduced Britains inter
10 @F . .
cent; Frances to 1.6 per cent, Italy's
to a per cent and so on down the
list.
On a per cent interest basis,
therefore, the present cash value"
Of existing settlements commonly is
regarded as being equivalent to a
reduction of 20 cents on the dol
lar for Britain, so cents on the
dollar for France, nearly 80 cents
on the dollar for Italy. And so on.
Another fiction is that the allies
made heavy sacrifices" when they
gave up German reparations at
Lausanne. The fact is, Germany
solemnly warned the allies long be-
fore Lausanne that, come what
might, she was through paying.
Now the one big question the
American people have to face is
On which side is their own bread
buttered?
If Europe, can pay the $11 100000
900 without disaster to her own or
our people by still further upset
ting world conditions, she should
pay. If she can't, then-all bitter
ness as well as sentiment aside
which will profit Americans more:
Coupling war debts revision with
a broad program of world economic
recovery, or permitting default, re-
pudiation and the final economic
debacle?
Next--Europe Hired" Mules, Not
Money.