Evening star., 1932-07-21
SH|PSTEAD SCORES
DEBT CANCELLATION
Europe Should Pay U. s., He
Tells Forum-Urges Arma-
ment Cuts.
Continued From Sixth Page)

Continued From Sixth Page)
States under the debt settlement shall
not be Cancelled.
After the secret 'gentlemen's agree
ment' leaked out Herriot of France
stated that that agreement merely car
ried out the conversations of Laval and
Hoover last Fall. Mr.. Chamberlain of
Great Britain stated the parties to the
agreement had had the benefit Of con-
sultation with representatives OF the
American Government However after
the President and the Secretary OF
State in letters to Senator Borah denied
such agreements having been made py
U.s. both HerriOt and Chamberlain said
they had been misquoted.
The fact remains that European
Governments believe that after this
Falls election. agreements will be made
with us to reduce or cancel the pay
ments that still remain unpaid
Sees Statesmen Erring.
'-The American taxpayer has paid for
20 many mistakes of his statesmen that
these statesmen seem almost Justified
In believing that he is willing to pay
some more.
Let me make it clear, the cancella-
tion of these sums will not get rid OF
the debts. 1t will only transfer, what
has not already been transferred, to the
taxpayers of the United States for pay
ment. The total cancellation OF Sl2,-
OOO, 900 900 of the debt due at the time
of the debt settlement means that tax
PAYERS of the United States pay to the
holders of the Liberty Bonds sum
equal to about $l00 for every man,
woman and child in the United States
This Is on account OF principal alone.
The additional payments on account OF
interest will depend on the length OF
life of the Liberty Bonds. The further
cancellation of the 25s per cent payable
annually for 81 years will mean an ad-
ditional annual burden of approximately
$50 million dollars on the taxpayer Of
the United States.
In 1924 when 1t became apparent
that Germany was not able to pay
reparationS in the amount her former
opponents thought she ought to paw
the Dawes plan was created. This plan
called for funding of part OF the
reparations by the selling of German
bonds to investors all over the world.
A great many of them were sold here
This gave rise to conflict of interests
between the private investor who mad
bought German and other foreign bonds
and the taxpayer who Is responsible
for payment Of the Liberty bonds Later
more bonds were sold to fund repara-
tions under the so-called Young plan.
American banks also loaned huge
sums of money to Europe on long and
credits were usually sold to people in
the form of bonds. The short term
credits were carried by the banks. AS
the amount of private loans Of this
character increased the conRct be-
tween the private investors, bankers
who hold these private Investments and
the American taxpayer also increased.
It Is apparent that debtor governments
and our own private investors IN for
eign securities are combining their
forces in a concerted drive against the
American taxpayer for the purpose OF
placing their debts and doubtful in
vestments on the taxpayers back. That
is stating 1t bluntly but appears to be
the fact.
Decision Necessary Soon.
TT has been apparent for some time
that the day will soon come when the
Government OF the United States would
have to make a decision as to whose
interest should be protected first. that
of the taxpayer or that OF the private
investor and banker. II Europe can
not pay both, will the Government re-
duce or cancel the foreign debts owing
sible for the private investor and tn.
banker to collect or will the Govern
ment refuse to reduce or cancel in
order to protect the taxpayer and leave
the private investors and the banker
to take a chance of collecting on his
investments? The day for that deci-
sion seems now to be upon us. In fact
It was upon us year ago at the time
Of the announcement of the Hoover
moratorium That decision by the
American Government was against the
taxpayer and in favor of the private
investor and foreign governments. II
the payments then postponed by us are
not paid when agreed tc this years
moratorium alone will cost the Amer
lean taxpayer $3.50 100000.
Certainly debts whether private or
public, whether national or interna-
tional. are an extraordinary burden at
this time due to the fact that they
were borrowed in terms Of cheap credit
money and now payment must be made
In money or commodities based on the
high relative value Of gold. But this
injustice all debtors must suffer
whether public or private, national or
international. The governments OF
Great Britain and France and other
European countries have gone long
way to eliminate this injustice to their
own debtors by reducing the value OF
the pound and the franc. The Gov
eminent of the United States. so far
having refused to take cognizance Of
this injustice to our debtors. whether
foreign or domestic, has greatly in
creased the burden Of debts to and
within the United States.
However. not until if and when our
own Government removes this injustice