The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-10-05
BY WILLIAM PHILIP sIMMS
Srrfnns-Uoward Foreign Editor


scripps- Howard Foreign Editor
WASHINGTON, Oct. 5.-Bitter
indeed has been the quarrel between
the United States and Great Britain
over Britain's stupendous war debt
to this country. of and on, it has
ragged for ten years. This week it
starts anew.
On Dec. Is. Britain will owe the
United States s4,674 900, 900, which is
$84 100000 more than when the debt
was funded a decade ago. She seems
to be getting out of debt like the
frog climbed out of the well-by
leaping up two feet and falling back
three.
At the end of the war, Britain
owed this country $4,277 900, 000 Her
war expenditures in America actual
ly amounted to s7,219,OOO, 900, but of
this 1884, 900 had gone for pur-
chase for other governments, and
this amount later was switched to
the accounts Of governments con-
cerned.
A further sum of SAG ,000, 600
which she charged us for steamship
fares across the Atlantic for our
doughboys, for supplies, and so on
likewise was deducted, as were GER
tain other items.
Interest Was Reduced
So, when the British war debt was
funded ten years ago, it amounted
in principal and accrued interest, to
$4600, 900 900. And the rate of in
terest, which had been per cent,
then was reduced to an average of
31-3 per cent for the sixty-two
years the annuities were to run.
Altogether, Britain has paid the
United States S2,0170O0,000. But
most of this was on account of in
terest. The principal has been re-
duced only $3.50 100000.
Meanwhile, things have happened
to swell the amount. Because of the
Hoover moratorium a $3.50, 000, 900
payment was postponed $50, 1000, 900
was left unpaid last June, and next
December another $118,000,0O0 will
fall due.
Britain is sore because, she claims,
the borrowed money was spent in
this country. Americans, profiting
by the war, made enormous killings.
Likewise much OF what she bought
was not for herself, but for the al
lies
Others Treated Better
Thus she was contributing to the
common victory in which America
shared Finally, when the allied war
debts we're funded at Washington,
France, Italy and the rest were
treated more generously than she.
To these assertions Andrew Mel
lon, then treasury secretary, re-
torted with some heat A big pro-
portion of the money borrowed by
Britain, he said, went for CONNER
cial, rather than for strictly war
= purposes.
Britain used $1,612,OOO,OOO to sta
Billie sterling eXehange-to enable
her to buy advantageously in other
countries instead of paying ruinous
prices due to deprecated pound.
A third of billion went to pay
off maturing British pre-war securi-
ties.
And finally, a lot of the stuff
the British bought in the United
States subsequently was reSold
abroad at a profit.
AS for generosity, Mellon figured
that the present cash value" of the
British settlement amounted to only
$3,3O0,OOO,O00 a write-off of 20 cents
on every dollar Britain owed.
Even so, replied the British,
France was let off for 48 cents on
the dollar, Belgium for so. and Italy
for 25. Why the discrimination?
Favors 10 Cents on Dollar
The American answer was simple.
All the war debts were funded on
a basis of capacity to pay, the
American funding. commission in
each case relying largely on each
debtors own estimate. At the time
of funding Britain's capacity uni
versallv was considered higher than
the rest.
Sir Frederick Leith-RoSs. chief
British negotiator, undoubtedly will
attempt to prove that Britain can
paw no such sum, regardless. He will
seek radical reduction if not cam
collation..
He will present not only Britain'S
case but. indirectly, that of France,
Italy and the more than dozen other
war debtors-in all, owing principal
and eventual interest, more than
$22,O00.O0O 900.
The debts can be paid, he will say,
ONLY in gold, in goods and IN
services. AS payment in gold is out,
because there is not enough of 1t IN
the world, and as America will not
accept goods or services. payment is
impossible. Why not do for the
allies what the allies did for Ger
many: Let them of for 10 cents on
the dollar?
Britain long has favored an-round
cancellation. For her it was a
made-to-measure policy. She had
coming in-providing she collected
which was extremely doubtful
almost exactly what she was due to