Evening star., 1932-04-20
|DEBT CANCEL|NG
| ASSA|LED BY bORAH
Britain's Failure to Provide
Payment Leads to Storm
of Protest.
BY the Associated Press.

BY the Associated Press.
A new storm of protest against
revision or cancellation Of the war debts
owed this country by European nations
has been unleashed in Congress, echoine
the declarations of unalterable opposi-
tion which rang forth when the one
year moratorium was ratified last
Winter.
Senator Borah, the chairman of the
Foreign Relations Committee, from the
Senate floor yesterday turned a smash
ing attack on the cancellation idea.
speaking Unexpectedly after it became
known that Great Britain had made
no budget provision for payment of the
debt installment due the United States
next Winter.
May Heed Warning.
The current moratorium expires In
June and, despite President Hoover,s
message to Congress last December 10.
asking provision for temporary adjust
ments" in the war debts, it has been
clear the administration had every in
tention of needing the sharp retort of
Congress, that the existing moratorium
was the limit to which American public
sentiment would go.
Borah warned the European nations
not to come to the United States for
debt relief until they have disarmed,
settled reparations and revised the Ver-
sailles treaty. In his powerful oratorical
voice, he told the Senate the World
War still goes on, "remorselessly and to
some extent more deStructively" than
on the battlefield. He turned upon the
plan of Alfred E. Smith for a 20-year
forgetting" Of the debts In exchange
for increased foreign trade.
IF we forget them for 20 years they
will be regarded as Cancelled. Whatever
the good faith in which the proposal
was put forward, 1t is proposal for
cancellation"
Puts Burden on Taxpayer.
The burden, he said. would rest upon
she American taxpayer, the benefit on
the private investor.
Senator Lewis OF Illinois, his home
States choice for the Democratic presi-
dental nomination, Joined In by term
ing the Smith plan part of an insidi-
Gus conspiracy" to convince the United
States it cannot recover until Europe
does.
Both followed Senator Reed, Repub-
lican. Pennsylvania, who told the Sen
ate it was his CONJUNCTION London would
make the payments, providing for them
after the June Lausanne conference,
and that no move was being made by
this administration to extend the mora
torium. His words carried weight be-
cause of his close relation not only with
President Hoover but with Andrew w.
Mellon, who has just become Ambassa-
dor to London. This appointment led
to worldwide speculation, hatly and re-
peatedly denied in Washington, that
Mellon would seek a new understand
ing on the debts.
In the House organized anti-prohibi-
tionists seized upon what they termed
England's intention to repudiate war
debt payments as another reason why
the United States should raise $780,
10000 from tax on 2.75 per cent beer.
Representative O'Connor of New
York, secretary of the Democratic wet
bloc, said repudiatio by other nations
simply would mean the American
Treasury would have to bear the addi-
tional burden.
We've been kidding ourselves for
years" O'Connor said Now, it's up to
US to face the actualities, for, in spite of
everything We can do these other
countries are going to try to cancel
their obligations to us.
There is great doubt in the minds
Of all concerned whether the tax bill
We are now passing will yield the reve-
nue. estimated as necessary to balance
the budget. In the event it doesn't
and the expected surplus OF $1,000 900
easily may be turned into 6 5000 ,000,-
coo deficit-weu be worse of than We
are now.
Favor Half Billion Margin.
I'VE shouldn't be doing business on
such narrow margin. If I were bal
aEcing the budget, I would figure on
half billion margin to meet the for
eign debt situation and the possibilities
Of other things we do not now expect.
Then If at the end of the first year
We had a surplus, we could begin to re-
duce these other excise taxes"
OConnor recalled that lib signatures
already had been put on the petition
pending in the House to take away from
the Ways and Means Committee the
O'Connor- Hull bill to legalize and tax
2.75 per cent beer. He predicted the
additional 81 names would be added
shortly.