Evening star., 1932-11-23
Europe's Debts to U. S.
Are the Peoples Money
no the EDITOR OF The star:

To the Editor Of The Star:
With tenacity worthy Of a better
cause, Europe, under the promptings OF
the international bankers, has resorted
to every form of propaganda and per-
sisted in every imaginable effort TO get
us to cancel her debts due US, and now,
since the election, she has come out
boldly and demands cancellation. These
fatuous efforts appear ncomprehenslpie,
in view of the fact that Congress has
declared by joint resolution that the
debts have been adjusted. and will not
be Cancelled, and that the matter Is
considered a closed incident, and that
both political parties declared against
cancellation in their recent platforms.
Any public official who should vote for
cancellation would thereby sign his own
political death warrant.
There is, however, phase OF this
question that has not apparently oc-
Cured to our American advocates OF
cancellation, which is this: The money
we loaned to Europe was not, in TACT,
loaned by the Government of the
United States, but by those of our people
who bought Liberty bonds. Our Gov
ernment was acting merely as an inter-
mediary in the transaction. These bonds
are in reality obligations of our Euro
pean debtors, and only technically
obligations of the taxpayers of the
United States, because they do not rep
resent obligations of our Government,
except in a technical and moral sense,
but are only evidence put out by our
Government of the indebtedness OF the
several European countries to those OF
our citizens who bought these bonds
They were issued simply in lieu OF the
bonds Of the several borrowers. who, for
some reason, were unable at the time
to furnish our treasury with their bonds
for sale in the American market. When
the Liberty bonds were issued our
people were assured that they would be
| liquidated by Europe when due. II
these debts are Cancelled or Europe re-
fuses to pay them, the individual tax
payers of the United States will be
| looked to for their payment. If they
are paid by the American people we viii
not only be making a gift to Europe oi
s11 ,O00, 900 900, but in addition will have
| to pay that amount to the comparatively
few holders of these bonds. Is there
any Justice in this to the millions oi
| our taxpayers who do not now and who
never did own any Liberty bonds2
In reality there Is no difference tr
principle between these bonds and the
outstanding external bonds Of European
and South American countries which
have been bought by our people through
international bankers. Both represent
Indebtedness Of foreign countries. Woulc
there be any more justice In making
the American taxpayer pay our Liberty
| bonds, which are nothing more or les;
than evidence of Europe's indebtedness
to the holders of them. than there
would be in taxing our people to re-
| imburse American holders of the exter-
nal bonds of foreign countries. which
have been defaulted or repudfated BY
them?
There is a practical side to this ques-
ton as well as the theoretical anc
technical, which should cause the
American advocates of cancellation tt
pause and consider the probable result.
| of cancellation. We now have tax bill
| in effect to raise four billions of dollar.
| to meet the deficit, balance the bulge
and to operate the Government for the
ensuing fiscal year. If we canoe
Europe's Indebtedness and thereby ado
to this the eleven billions they owe us
our people cannot stand this additiona
!. burden, even IL the resources were avail
/ able, which they are not, because thu
sources of revenue are drying up mor'
and more each month, with little pros
!
the cancellation Of Europe's debts tt
us the cancellation of cur Liberty Bond
will follow of necessity, not only be
cause of the feeling of the people o
the injustice Of their being made. tt
pay them under such circumstances, bu
also because our Government could no
find the revenue to pay them, and tt
attempt to enforce it would produce
revolution in the country. II Cancelled
| the holders of these bonds will be ex
pected by the taxpayers to lcok to Eu
rope for their payment and not to them
as they would feel that they would b
under no more obligation under tn
4 circumstances to pay them than the!
would be to reimburse American holder
of the external bonds CT foreign countrie
which had been repudiated by them.
1t is not the purpose of this com
munication to advocate cancellation O
Liberty bonds in the event our Govern
ment should cancel the European debts
but solely to warn our people OF th
probability of such action.
ALEXANDER SIDNEY LANIER.