The midland journal. (Rising Sun, Md.) 1885-1947, 1932-12-23
WAR-DEBTS - MENACE or
OPPORTUNITY

Prepared by Richard r. Wood,
Secretary, Friends Peace
Committee, 304 Arch
Street, Phila., Pa.
/ War-debts offer this country
either a great opportunity or a
serious menace. AS the decis-
ions about War-debt policies
rest with Congress, it behooves
the constituents of Congress-
men to inform themselves and
their representatives of the is
sues involved. The question
is not so simple as an ordinary
repayment of an ordinary debt.
The war-debts, as funded by
means of a series of negoti-
ations beginning in 1928, in
volve payments to the United
States over a period of 81
years. The total annual pay
ments to this country vary
from $168,000,OOO in 1928 to
$425, 600, 1000, in 1885. TIL e
total of $4,000, 651, 1892 that
would be paid during that
period includes $11, ST., 261, 900
of funded debt and $lO,623,-
390,992 of interest. Huge as
these totals are, they are less
than they would have been had
not the interest rates at which
the loans were originally made
been reduced from wartime
levels to considerably lower
rates. the maximum now being
3.3%. Even that is somewhat
higher interest than the United.
States Government now has to
pay.
The total instalment of war
debt payments due during the
fiscal year 1928 is slightly
less than $270,OOO,O0O.
Our principal debtors, hay
ing been refused the requested
postponement of the install
ments due December 18th, are
reported to be renewing their
requests more urgently. While
the immediate postponement
has been refused, both Presi-
dent Hoover and President
elect Roosevelt have indicated
the necessity of reviewing the
debt-settlements, if the debtors
request it. Citizens of the
United States should appreci-
ate what is involved.
Reputation is possibility
If the United States maintains
an infiexible attitude. The
parliament of France has sue
cessfully asserted it's right to
grant or withhold funds to
make the payment, and the
British parliament is reported
to be trying to do likewise.
liquidation would tend to in
crease the prevailing uncer-
talnty as to general business
conditions.
lnsistence on ments,
should it succeed, would prob
ably involve economic and DO
litical consequences inconveni-
ent to the United States. Pay
ments can be made in goods or
in money. At present there is
strong opposition to any con-
siderable influx of foreign
goods in competition with do
nestle products Attempts to
pay in money would involve
further depreciation of depre-
clated currencies, resulting in
further diminution of the pur-
chasing power of our foreign
customers, and in the intensi-
tication of foreign competition
stimulated by deprecated cur
rencies, and in further lower
ing OF the commodity price
levels.
Attempts to pay in money
would also tend to reduce still
further the price level Of for
eign securities held by individ-
uals and financial institutions
in the United States, thus in
creasing the difficulties of our
own banks. ct must be re-
membered that the war-debt
payments, being superimposed
on the total structure OF for
eign trade, can have a disturb
ing effect entirely out Of pro-
portion to their relatively
small total amounts.)
Politically, insistence on pay
ment is likely to increase the
difficulty of securing from
Franco 0nnanccionc IN liz