Evening star., 1937-06-20

send us $l,s4o, 900 900 in war debt
payments. In addition our receipts
from abroad during those nine years
on account of favorable balance OF
merchandise trade and four various
so-called service" items in our balance
of payments involved payments by
foreigners Of s2,339, 100000 additional
The total was paid for in part by gold
and currency which came from abroad
but mainly 1t was Offset by our huge
capital investments abroad: s3,l66.-
100000. The dollars which We Sc
lavishly made available to the world
at large made it easily possible for the
war debts to be serviced before the de-
preston. Then came the depression
We Pay Foreigners.
Following the far-rea ching events
Of 1888. our capital outflow ceased
and capital commenced moving into
this country. BY 1886 on commodity
and service accounts We no longer
were receiving payment from abroad
but fo- the first time had to pay
foreigners $l32,000,000.
For gold and silver alone, during
1886, we gave foreigners $4.681,-
100000. Yet during that triennium
not one million dollars came in or
war debt account. It is said that
Europe cannot pay its debts because
We won't take more goods in pay.
ment. If we took more goods. it Is
argued, the dollars We would pay
for them would help the debtor gov.
ernments meet their debts.
Well, the balance Of payments fig.
ures quoted above show that we have
certainly been making dollars plentiful
abroad these past three years. We
have been taking and paying for ton.
Of gold and silver which we do nor
need at all, and in addition we have
increased our gross purchases o.
foreign goods from ST .450. 100000 ir
1888 to $2.419.OO0,00o in 1886. Oul
favorable balance of commodity trade
which climbed to s478,oo0,0o0 in 1884
(the year after devaluation OF the
dollar), was down to $34,000,000 last
year. This year the balance will b<
unfavorable. the first quarter figures
plainly indicate.
Thus, in two different ways we have
been making it easier for the worlc
to pay its debts to US, by taking golc
and silver in exchange for dollars, anc
by importing more goods than w
export.
johnson Act Potent.
The apparent unwillingness Of the
debtors even to discuss the matter
of paying within their present ca.
pacity Is still their official stand. But
unofncially, 1t seems to have beer
tempered somewhat as result o1
the johnson act of 1884, which pro.
hibits financial transactions with
foreign governments in default or
their obligations to the United State.
Government. In the event of wal
abroad, the defaulting government!
would not be able to borrow here
However, more serious obstacle II
case Of war is our present and pending
neutrality policy, evidence of q grow
ing dislike for entangling economi,
relations with foreigners. The knowl
edge Of our dislike Of European wal
makes the debtors less careful abou
their credit standing here.
Varied suggestions for a settlement
Of the war-debt question have beer
made. For example, 1t has been pri'
vately suggested that the debts b<
liquidated by lump-sum payments tt
be financed, in effect, by European
borrowing from the American invest.
ing public. While this would eliminate
the United States Government from
the picture. and would, undoubtedly
involve q material reduction in the
total amount of war debts at present
considered outstanding, there Is still
q question as to how enthusiastically
American investors might participate
"Once bit, twice shy" the saying goes
Fom time to time other suggestions
have been made, for example. thai
West indies territory be offered Us BY
debtor countries possessing IT. thai