Evening star., 1933-12-10
BY FRANK H. SIMONDS.
close approach of another due
date In war debts finds the
United States far too absorbed
i in its own domestic problems to


date In war debts finds the
United States far too absorbed
i in its own domestic problems to
pay the same attention to the
question of these debts that it has in
the past. In addition, slowly but surely
the impression Is gaining ground In
the country that the European debtors
are not going to pay much Of anything
anyway and that there Is little or MOTH
ing the American Government can do
about it.
That the practical sides Of the debt
problem have been widely perceived :
the questions Of how payments could be
made or received, what effect upon
American interests payment in goods
and services would have-can hardly be
asserted. The mass of the American
people still believe the debtor nations
could pay us If they wanted to and
that the United States could accept
payment without difficulty. Thus an
undercurrent of bitterness remains and
is likely to endure for long time. And,
as a consequence, there is no evidence
to sustain the notion that Congress
would agree to any new and drastic
reduction of the debt figures.
On the other hand it is not less clear
that the European debtors now regard
the field of actuality. Certain coun-
tries, like France, Belgium and Poland
will default again without making the
smallest attempt to obtain acceptance
even of token" payment. Others, like
Britain and Italy will offer token"
payments, but in every case these will
be so small as to have no real impor-
tance What is also significant is that
the British, who are required to pay the
largest installment, have already ma
terially reduced their token" offering
from last June and others have imi-
tated their course.
viii Pay Per Cent Now.
Thus, where the British offered s1o,-
600 900 to meet an installment Of $75,-
100000 six months ago, they will now
transfer $7,500,000 on account OF an
1nstallment of $177,000,000 Accordingly,
where they paid IA per cent before, they
will pay approximately Z per cent now.
Actually the situation is little differ
ent. Six months ago they paid in silver
and the real value of their remittance
was only around. S7,500,000. Now they
will pay in American currency which,
owing to the depreciation of the dollar,
brings the real value Of their contribu-
ton down to about s4.500.000.
In a word, the British are paying
something less than per cent OF their
semi-annual installment this time where
they paid about 10 per cent last time.
And that was precisely the course I
forecast here many weeks ago. From
now on 1t seems wholly probably that
the British will continue to pay this S
per cent regularly to avoid the discom-
fort of actual reputation until such
time as they are able to make final
settlement In. such a settlement, too.
they might be ready to go as high as
10 per cent of the total capital indebted
ness of approximately s4,500 ,000. 900,
tut that is the outside limit.
Meantime, of course, the actual re-
ceipts by the United States Treasury
are steadily declining. A year ago the
December debt payments from all
debtor nations amounted to about 80
per cent of the sums actually due. In
June the total fell to about 8 per cent.
In the present month the total, with
allowance due for the depreciation Of
the dollar. viii be around per cent.
And, at the same time, as result
Of the unpaid balances, the capital Of
the war debts is again rising rapidly.
reach s3o0,Oo0,00
Broadly speaking, therefore, what has
happened is that following the Hoover
moratorium, which was proposed by the
United States. the debtor nations, fall
ing to persuade America to prolong
that moratorium, have established one
of their own. And where the Hoover
moratorium interrupted all payments
for IL months, the European mora
torium has now established a perma-
nent cessation Of around e6 per cent
Of all payments. OF course, too, in the
case of France, Belgium, Poland and
certain other countries the moratorium
Is absolute.
Few people in the United States have,
moreover appreciated the implications
Of the present monetary policy of this
country in respect of the debt In
depreciating the dollar to around so
cents in gold value, the Roosevelt ad-
ministration has already reduced the
allied debts by the same amount, for,
obviously, the debtor nations will pay