The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-01-19
MELLON STATES
u. S. POLICY ON
FOREIGN DEBTS
Administration Insists on
Justice to Americans and
Foreigners.
BY WILLIAM PHILIP SIMS
scripps-Howafd FOREIGN Editor

WASHINGTON, Jan. 19-The adj
ministration's policy on war debts,
as stated by Andrew w. Mellon, sec
rotary OF the treasury, is basically
this:
TO ask a debtor nation to pay
substantially less than it is able,
without undue burden on its people,
is to do an injustice to our own
taxpayers.
TO ask foreign debtor to pay
more than its capacity, is to be
guilty of an injustice such as I am
sure can not be charged against
us"
The contention raised in this
country and abroad that the loans
to the allies were "a contribution to
q common cause" and that our dol
lars merely took the place of SOL
diers who did not appear in the field
for full year following our declara-
ton of war against Germany, is re-
futed.
America Forced to Pay
American troops we're very much
on the spot when the crucial time
came, Mellon told the 116 Princeton
professors who, with the faculty of
political science at Columbia, adj
vocated debt revision.
Furthermore, when it came to
treating our advances to the allies
as a contribution to a common
cause, he said, they overlooked the
fact that when America spent hun
dreds Of millions of dollars for
goods and services in England and
France, she had to pay cash. France
and Britain did not contribute goods
and service to us in the common
cause.
Lastly, Mellon observed, the pres
ent value of the war debt settlement
at per cent, rate less than most
of the debtors now have to pay for
money, is-eXcept in the case Of
Britain-either less than, or approx
imately the same, as the amounts
borrowed after the war ended.
Only Commercial Debt Left
Frances after-war Indebtedness
with interest" he illustrated,
amounted to $1,655, 100000. The
Mellon-Berenger settlement has a
present value of 81 100000"
That is to say, if Frances debt to
this country is divided into what was
borrowed during the war, on her &C
tual war debts, and what was Dor
rowed after the war, or her COM
mercial debts. it will be seen that
her war debt has virtually been can
celled, and that only the CONNER
cial debt remains to be paid.
Similarly, "Belgium's post-armi-
stice borrowings with interest were
$258,000,000 and the present value
of the settlement is $192,OO0,0O0."
Britain Answered
The British war debt to this coun-
try is on slightly different basis.
Some of the money she borrowed,
she re-lent to the allies. Some
went for food, which she resold to
her own people. Some paid off ma
turing securities, floated before the
war, and so on. The money adj
yanced did not all go for strictly war
purposes.
The principle of capacity to pay
applied to her the same as to others.
Being more able to pay she was
asked to pay more. On an average
she was due to receive from the
allies, and from Germany repara-
tions something like $190,000,000
annually. and she was required to
pay the United States only $780,
100000 net yearly surplus to her
of $30,0O0000.
Britain's announced policy has
been that she only wanted to make
incoming debt payments balance
outgoing ones.
Such is Melons reply to Britain's
complaint that she had been dis
eliminated against-that whereas
the United States knocked off So
per cent of the French, 81 per cent
of the Belgian, and 10 per cent of
the Italian debt, hers has been re-
duced only % per cent.