Evening star., 1936-12-17
Debt Defaults.

December Is seems doomed to become
a fixture in Uncle Sans calendar as
Default day. Once again it has come
and gone without payments from any
of the European debtor nations in
arrears, with the continued single and
splendid exception of Finland, which,
as usual, accounted fully and promptly
for her Semi-annual inStallment. Great
Britain, France and Italy, the principal
debtors, instead of cash, again pre-
sented notes regretting inability to make
the payments due this month. From
the smaller debtor nations came similar
representations.
Although no payments are forthcom-
ing from the more important debtors,
there are indications, especially from the
British and French, that they do not
intend indefinitely to prolong their de-
faulting status. Such signs are gratify-
ing because the Western powers un-
doubtedly will set the pace for other
delinquentS. Great Britain, whose cur
rent unpaid installment of S117000,000
brings her total arrears to roundly $780,
100000, is ready to reopen discussions
looking to new settlement, whenever
circumstances warrant the hope that a
satisfactory result might be reached"
This language, while holding out no
assured prospect of payment resump-
ton, token" or otherwise, is more
promising in tone than that of previous
communications merely affirming British
inability to pay.
The French, who allowed another $22,-
100000 installment to go by default,
express hope that improved political and
economic conditions throughout the
world will permit revived negotiations
looking to an acceptable arrangement.
The Blum government is sending a new
ambassador to the United States,
M. Georges Bonnet, former minister of
finance, supposedly with the special mis-
sion of seeking readjustment of the
81, 1000, 900 900 debt. There are unofficial
suggestions that France hopes for
revision downward of the Mellon
Berenger agreement, whereby the total
obligation would be reduced to $780,
00O, 900, payable in twenty annual INSTALL
ments of $28,0O0,OOO each. 1t is doubtful
that Congress, final arbiter in debt
matters, would consent to a concession
which would cancel more than three
quarters of the original debt.
Our French friends, nevertheless, make
several points deserving of thoughtful
consideration. They emphasize their
desire to promise only what it will be
possible to perform" They register pro
found regret that the distressing eco
nomic depression which France has just
undergone and the state of world rela-
tions do not permit as yet the presenta-
ton of any proposals" France hopes
that "co-operative understanding, to-
gether with improvement of world
economics, as well as triumph of the
democratic thesis which France is en-
deavoring to sustain by the limitation
of ornaments" will sooner or later enable
Paris to initiate and carry out mutually
satisfactory discussions. Americans do
we'll to remember that progressive re-
habilitation of world business is impera-
tive if debt readjustments are ever to
become practicable. 1t is to facilitate
such developments that Secretary Hull is
SO earnestly promoting his reciprocal
trade program. When nations can sell
more goods, their capacity to pay, as well
as to buy, is proportionately augmented.