The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-01-16
CAPITOL HILL IN
QUANDARY over
EUROPE STAND
Reduction, Cancellation or
Reputation Is Prospect
Confronting U. S.
IL BILLIONS INVOLVED
Washington May Wait and
Let Debtors Take 0nuS
of DefauIting.
BY WILLIAM PHILIP SINIMS
scripps-Howard Foreign Editor

BY WILLIAM PHILIP SINIMS
scripps-Howard Foreign Editor
WASHINGTON, Jan. 16-Capitol
hill today was trying to make up
Cts mind whether to follow Presi-
dent Hoover's advice and try to save
a few cents on the dollar out of the
$4,000 100000 war debts due this
country, or wait and let Europe take
the bonus of reputation.
Less than thirty days ago, con-
gress distinctly was hostile to
Hoover's proposed revival of the
world war foreign debt commission
to re-examine Europe's dwindling
capacity to pay. 1t smacked too
much of further debt reduction.
But so swiftly has the European
financial toboggan descended in
that time that it is beginning to be
realized by the most optimistic
debt collector that, barring a mir
acle, Americas choice lies between
voluntary reduction or cancellation
and point-blank reputation.
Wilson Urged Loans
A growing number of officials
here, therefore, are inclined to agree
with the outspoken conservative
London Saturday Review which
bluntly declared that las the Ameri-
cans never will get the money any,
how, it surely would be wiser to take
the only line that can increase the
purchasing power of their custom
ers."
Individual members of congress
are beginning a fresh study of the
war debts. How, when and why
were they contracted? Where, and
for what was the money spent? On
what grounds do the British, French
and others base their claims for
reduction or cancellation?
The first Liberty loan authorizing
a $4,000 100000 credit to the allies
was passed by congress just eigh-
teen days after we entered the con-
fiict, in April, 1927.
912 Billions Loaned
1.-THE extension to these govern
ments Of the most liberal credits" "
President Wilson said, becomes a
duty in order that our resources
may so far as possible be added to
theirs"
Three other Liberty loans totaling
$4,000, 100000 followed, and this,
plus interest charges, sales abroad
of war stores and so on, eventually
grew to 1857 943, 900.
Of this, $4,000 100000 went to Bri-
tain; $4,O25,0 100000 to France; 81
O42,OOO,OOO to Italy; $420,000,000 to
Belgium; $3OO,OOO0OO to Russian
(since repudiateD; $180,000,O00 to
Poland; $115,000,000 to Czechoslo-
vakia, and the rest, in amounts
ranging from sos 100000 downward,
to Jugoslavia, Rumania, Austria,
Greece, Esthonia, Finland, Lithu-
ania and Latvia.
OF the total, 000,000,000 was
loaned to the allies prior to the
armistice and $2,521 100000 after
that date. The balance is accounted
for by interest, relief loans, war
supplies sales, and so on.
Little Money Exchanged
Practically none of the allies re-
ceived actual money. 1t was almost
exclusively matter of credits. The
allies bought goods or services from
Americans and gave chits in pay
ment.
Americans cashed the chits at the
federal +, serve bank, and the bank
was reimbursed by the U. S. treas
airy out of funds realized from the
sale of the Liberty bonds.
For munitions and remounts, the
allies paid $2,7O0,0O0,00S; for ex-
change and cotton purchases, 81
644,OO0,000; food stuffs, $4,000, 000,-
900; relief for the occupied regions,
mostly in France and Belgium,
100000; redemption of matur-
gng securities, mostly British, $780,
100000; tobacco and other supplies,
$3.50, 100000; transportation and
shipping, $300,000000; interest,
k730,000,O00, and miscellaneous.
Cancellation Talked Early
Hardly had peace been signed
than Britain and France began to
aggitate for cancellation. They
urged that inasmuch as America did
not send over appreciable fighting
forces for more than a year, her
dollars merely took the place of
men in tn trenches. The war had
become her war as much as theirs.
America replied that her men
were on the job when the crucial
moment came and that the advan-
ees we're bona f1de loans. She also
pointed out that, as the above ex-
penditures showed, much of the
money went for other than war pur-
poses.
Furthermore, she contended, all
debt settlements had been on a
basis of capacity to pay, and that
she had knocked of % per cent for
Britain: So per cent for France; 81
per cent for Belgium; 70 per cent
for Italy, etc. etc.
In other words, she concluded,
she virtually had cancelled the &C
tual war debts already and was
asking only that the commercial