Evening star., 1932-07-09
LAUSANNE ACCORD
HELD BLOW TO j. S.
Agreement Comes With
Crushing Effect, Rainey
Tells House.

The United States is ready to con-
slider separate proposals for q reduc-
ton of the $1,000 900, 900 owed by
Is nations on loans during and after
the World War
The State Department made this an
nouncement yesterday after other Euro
pean nations agreed at Lausanne to
reduce Germany's reparations to $780,
10000
The United States has not promised
to revise or cancel debts. The Govern
ment has. however, stated repeatedly
it would grant a rehearing to Euro
pean debtors individually after they
had agreed among themselves to settle
reparations.
The United States has insisted it had
no interest in reparations as it refused
to take nny from Germany.
Any change in the amount OF war
debt payments would have to be ap-
proved by Congress. which is on record
against further reduction CT cancella-
ton. Both House and Senate took this
position in approving the Hoover one
year moratorium on intergove- mnental
debts.
Rainey Sees Crushing Blow"
Meanwhile. on Capitol HILL Repre-
sentative Rainey, the Democratic lead
er, told the House the Lausanne agree
ment comes with crushing effect upon
this country"
Last June when President Hoover
agreed to a years moratorium, he can
celed for one year $4,000, 100000 in
debtedneSs," Rainey said.
When the President did that he can
celed the $4,000 600, 900 they owe U.s.
Our taxpayers are going to be compelled
to pay this $4,000 100000 through the
years.
TT already is admitted that the tax
bill fails to balance the budget by $780,
100000. We counted as cash the $685.
100000 owed us this year.
Therefore, it means that without
further income losses there will be
deficit this year of S419,000, ,000."
Representative Stafford, Republican,
of Wisconsin said "the two great coun-
tries that negotiated the agreement are
to be congratulated"
They are making it possible for Ger
many to recover industrially." he added.
Stafford said these foreign govern
ments are not shysters; they are going
to pay their debts
1t remains to be seen how great a
cut European powers will ask the United
States to make IN war obligations. Some
economists predict American debtors
will suggest a reduction of 80 per cent,
which is approximately the slash just
made in German reparations.
U. S. Would Get Billion.
On this basis the United States
would be offered slightly more than
billion dollars.
Great Britain, France and Italy owe
approximately 80 per cent of the war
debts due this Government. the remain
der being obligations of Belgium, Greece,
Austria and other Central European and
Baltic countries
In its previous war debts negotia-
tions the United States always has
dealt separately with each country and
has made terms based on the economic
conditions in the country. taking into
full consideration the ability to pay
This plan again will be followed.
The impression prevailed in official
circles that extended preliminary ne
gotiationS would have to take place
before any concrete proposals are sub
mitted and that there is little likelihood
of settlements until short time before
December Is, when the next important
payments to the United States fall due.
Senator Johnson, Republican, of Cali
fornia, predicted the reparations agree
ment would be followed after the cleo
ton in this country with renewed de-
mands for war debt cancellation.
tssThere will probably he deep and
significant silence by the administration
until after the elections" Johnson said
off the floor, but then those who be-
lieve America should receive its due
must be on guard"
% fho ATflf-
tary Affairs Committee said the action
at Lausanne had not changed his atti-
tude with regard to cancellation Of
war debts" and predicted that Con-
greSs would continue to oppose 1t.
Cites Moratorium.
johnson said this country has con-
tinuously maintained that reparations
and debts were wholly distinct and un-
related, and the administration had
insisted upon this, though its acts
might be otherwise construed"
Il said a year ago when the mora
torium was sprung upon a surprised
and unsuspecting Congress that it was
the beginning of cancellation" john
sons statement said.
Wei! hear much from our inter-
nationalistS in the future-probably
after election-about the fairness now
of cancellation of what is owed the
United States.
1T means that the United States
must pay the ultimate cost of the Great
War, Just as the moratorium has meant,
as events have demonstrated, that the
overburdened American people must
pay in heavy taxes what European debt
ors of ours should pay.
Congress must be reckoned with in
cancellation, but having so easily fooled
Congress once with the moratorium, it
is probably expected the same doubtful
procedure may again be effective"
Chairman Borah Of the Senate For
eign Relations Committee withheld
comment
Opposition to revision or cancellation
of the debts was expressed by Senator
Vandenberg Republican, of Michigan),
but he said the settlement was very
splendid milestone in the postwar