Evening star., 1933-12-21
TRADE BARGAINING
WITH DEBTS URGED
Castle Interprets Recent
French Note as Final
Refusal to Pay.

A suggestion that debt concessions
might be exchanged for trade ad-
vantages was made last night by Will
liam R. Castle. jr., Undersecretary Of
State in the Hoover administration.
Speaking in the National Radio
Forum, arranged by The Star and
broadcast over coaSt-to-coast network
of the National BroadcaSting Co.,
Castle urged speed in adjustment of
foreign debts owed this country, saying,
with particular reference to France:
"A few more defaults and the con-
science of the debtor will fail to re-
mind him of his tranSgresSionS.
Sees Refusal to Pay.
Mr.. Castle asked if it might not be
far more sensible to link debts and
trade than to seek a bargain under
which more American apples may be
permitted in France in return for a
large American quota on French wines.
Apple-wine discussions have been in
progress at the State Department for
several days.
The speaker interpreted the last
French debt note as coming close to
saying I'VE do not intend to pay any
more or even discuss the matter
further"
mo word has ever been said by any
representative of the American Gov
eminent to justify such an attitude"
he said.
There is no doubt, the former official
added, that debts are "a source of deep
irritation and in this way retard
economic recovery"
Text of Address.
The text of Mr.. Castles address
follows;
Out Of a total amount Of approxi-
mately s153, 900 900 due in war debt
payments on December Is, the Ameri-
can Treasury received approximately
$9,000000. This fact is in itself so
striking that it seems worth while to
turn aside for few moments from con-
Slderation of the domestic questions
which fill the press to review the his
tory of the debts in order that we may
understand little the present situa-
ton.
The subject of these debts, which are
owed to the United States by the allied
governments as the result of American
participation in the war, is one which
has been often discussed but never fully
graSped by people in general, Perhaps
one reason is that it has been emotion
ally discussed, both here and abroad,
and emotion should play no part in
financial discussion. In Europe the
number Of allied dead has been con-
trasted with the number of American
dollars expended in the prosecution of
the war, but no account has been taken
of the number of allied soldiers whose
lives were saved by American partici-
patton and through the help of these
dollars.
On the other hand We in the United
States have been inclined to harden
our hearts and to say angrily, You owe
the money. Pay 1t. We are not in
terested in your budgets or in your
economic conditions" AS a matter of
fact We must be. Europe can no more
come completely out of the depression
without America than we can achieve
full prosperity while the rest of the
world remains miserable.
Before We entered the war ourselves
we had already loaned Sl,065, 900 900
to Great Britain and $694, 100000 to
France. These were private loans,
much OF the amount being already
repaid, and they need not concern u.s.
BY the time that we entered the war
the resources of the allies were at
low ebb and the Treasury agreed to
finance allied purchases in the United
States. Congress authorized a fund of
$4,000 100000 for this purpose and by
the time of the armiStice we had loaned
some eight billion. After the armistice
we loaned three billion more for relief
and reconstruction purposes.
Individual Loans.
1t must be remembered that all these
loans we're to individual nations. There
was not made at the time any sugges-
ton that they might be pooled. The
Congress, it is true, discussed making
a gift to France of five hundred mil
lion as recompense for the assistance
France had given us in the Revolution,
but this gift the French Government
proudly refused. Everywhere the loans
were considered as a business transac-
ton, although at the time they we're
made there were no definite arrange
mentS as to payment. After the armi-
stice. in view Of the critical economic
conditions in Europe, the Treasury
granted three-year moratorium on
interest payments, but it was under
stood that steps should promptly be
taken for funding the various debts.
AT the time of tn Peace Conference
1t was argued that there should be a
general settlement instead of separate
settlements with the individual debtors,
but Mr.. Carter Glass at that time Sec
retary of the Treasury rejected this
plan in an admirable letter which fully
set forth the American point of view.
1t was not until year later, in 1920,
that Great Britain made the suggestion
Of cancellation of all inter-allied debts
on the ground that it would clear the
way for recovery. This, also, the United
States rejected. 1t obviously placed the
burden of sacrifice on America and, as
was well pointed out, the European
nations had done little to set their own
house in order so that they might bear
their share. They had not tried to
balance their budgets; they had not
tried to stop imitation, but were still
printing currency; they we're spending
ABSURD sums in armament
1t was in this same year also that
Europe conceived the idea that the
lnterallied Indebtedness should be
balanced of against German repara-