Evening star., 1933-06-18
WAR DEBT SLASHES
HELD INEVITABLE
Reductions Have Been Made
at Every Conference From
Versailles to Lausanne.
BY DAVID LAWRENCE.

Substantial reduction Of the allied
war debts to the United States may
now be taken for granted. All the
processes of whiting SO common in
the relation of debtor and creditor have
been In operation during the recent ne
gotiations and the hurdles and barriers
Of moral condemnation for failure to
pay have been taken.
The truth Is the American Congress
Is being gradually let down. 1t took
several stages for the European peoples
to be met face to face with the fact
that Germany would pay but q few
cents on the dollar. The Versailles
conference set the reparation payments
at thirty-two billions. Then came the
Dawes plan, which introduced the idea
of different kinds Of bonds, which was
only method OF eanceling some of
the debt. After the Dawes plan came
the Young plan. which brought the pay
ments down still more. And finally
came Lausanne, which virtually can
celed the whole thing, for the lump
sum amounted to less than q billion
dollars.
People Never Realised Cuts.
After each conference. the people OF
the countries which had been led to
expect German payment were let down.
1t could not happen In one step. 1t
took several to 60 from Versailles to
Lausanne and q decade of time besides
The American people never grasped
clearly that there were any reductions
involved In the various funding agree
ments made under the Harding admin
istratiOn. But there were material con-
cessions on the interest. Since then
the allies have tried hard to revise the
annuities, but without success.
The French realistically took the po-
sition that the December payment was
superf1uotls unless an agreement to re-
duce was made. The British accepted
the Hoover plea to pay the December
installment and get q revision later.
No such revision has been forthcoming.
So the British now try default, but
to save faces all around there Is q 10
per cent payment made. It is called an
act of good faith. President Roosevelt
joins the carnouf1age by saying all rea-
sonable people will not call 10 cents on
the dollar q default. What he means
Is that as long as debtor makes what
Is known as a curtailment, he can
hardly be accused of having ignored
the debt or permitted 1t to become an
inactive account.
Plan 10 Per Cent Settlement
But now that the President thinks 10
per cent payments are not defaults the
British will feel that tenth of the to-
tai Is good basis for computation any
how. 1t may be expected, therefore.
that the next move will be an offer to
settle the whole thing on basis of 10
cents on the dollar
Unquestionably this will be refused
by the American Government and the
American Congress. But the receipt Of
such lump sum, namely, q tenth, will
be acknowledged without prejudice. !"
And that will be the end of the debt
payments. For while the American
Congress can never consent to formal
modification. the British and French
and other debtors cannot get the con-
sent OF their respective Parliaments to
pay any more.
And so it will drift until some day
the balance will be cleaned I'D by a
trade agreement or exchange UNDER
standing In which the debts will be
used as some kind Of an offset to in
crease American trade. Meanwhile.
American public opinion is expected
slowly to reconcile itself to non-pay-
ment just as the British and French
peoples have by various steps come to
the same conclusion about German
reparation payments. Maybe time Is
the best way to settle the debt uues-
ton after all.
Copyright. 1933)