The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-03-30
BY WILLIAM PHILIP SIMMs
Scripps-Howard FOREIGN Editor


the subject.
BY WILLIAM PHILIP SIMMS
scripps-Howard FOREIGN Editor
WASHINGTON, March 5O.-If
Great Britain or Europe believes
Andrew w. Mellon, our new am
bassador to the court Of st. James,
intends to start move for war
debts cancellation when he reaches
London, a rude awakening is GER
tain.
If congress, on the other hand,
believes he will follow it's lead and
demand the last red cent" whether
or no, in accordance with existing
agreements, it, too, is doomed to
disappointment.
First Of these categorical state
ments is made upon authority of
both the White House and the de-
partment of state. The second is
based upon the expressed view of
Ambassador Mellon himself.
While Mellon, as officially stated.
will not take the initiative. there
is reason to believe If and when
there Is a new debt deal-and there
almost certainly will be one before
the year is out-he will recommend
revision on basis of the individual
nations capacity to pay.
Wants Just Settlement
Frankly" he has said, Il know
Of no fairer formula than capacity
TO pay.
ITO ask debtor nation to pay
substantially less than it is able to
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 act of injustice such
as 1 am sure can not be charged
against us"
This was the formula he used in
negotiating debt settlements with
Britain, France, Italy, Belgium and
the other allied powers. Britain
was let off for about 30 cents on
the dollar, France so cents, Italy &c
cents, and so on.
When President John Grier Hib-
ben and the 116 professors of
Princeton took him to task for this
inequality Of treatment, Mellon,
then secretary of the treasury, re-
torted with heat.
Maps His Formula
Apparently" he said, you would
have all debtors treated on an
equality. Does this mean that the
Italian settlement should be raised
to point where it would CORE
spond to the British-which, of
course, would impose a burden i'm
possible of performance by Italy?
"Or do you propose that the Brit
ish be reduced to so per cent and
the Italian raised to SO per cent
which would make an easy settle
ment for Britain and a still impos-
sible settlement for Italy?
OR do you propose that the
British settlement shall be brought
down to the Italian 26 per cent
thus imposing no real burden on
England at all?"
Here, all mapped out and dia-
grammed, is the Mellon formula, if,
when he gets to London the war
debts question comes up again
unless, of course, he has not per-
formed a recent, complete, and I'M
chronicled somersault.
Mellon, however, as chief negoti-
ator of the debt settlements, APP
parently did not regard them neces-
sarily as the law of the Modes and
PersianS.
Fair Balance Struck
'No one can insure the future, Z"
he told the cancellationists of 1927.
But, given normal conditions, he
believed the settlements struck a
Just balance as between the Amer
lean taxpayer and our wartime
allies. With peace, and develop
ment of trade internally and ex-
ternally," he said, the settlements
should not prove burden too
heavy to bear in the future.
AT any rate, he said, "a fair trial
now can be had, not in theory. but
in practice-the apparent inference
being that if things did not work
out as expected, or if conditions
changed, something could be done
about it when the time came.
Now, five years later, the former
secretary of the treasury is am
baSsador to Great Britain, leading
exponent Of cancellation or revision.
The normal conditions of which
he spoke no longer prevail.
The development of trade" at
home and between nations listed by
him as essential to the proper
working of the settlements has not
been realized. Far from it. Instead
of progressing it has suffered a rec
ord slump.
Peace Broken Down
And worlu peace, another vital
element If the debt deals were to
stand, has broken down. There
have been wars and rumors of wars
foreign, civil and revolutionary
almost literally by the dozen.
Beyond question the world faces
a sadly altered situation. Economic
ally, it has gone from bad to worse
since the capacity of the various
nations 20 pay was gagged. So Am
basSador Mellon will reach his post
just about in time to feel the full
force of Europe's rising clamor for
revision.
Obviously. therefore, his stand
will be watched with interest.
Next-How Congress Stands on
War Debts.