Evening star., 1940-05-25


nothing to America on their wal
debts of the last war. The truth is
that out of principal sum of about
$4,500, 100000 borrowed by Great
Britain, a repayment in cash OF
nearly s2,000.000,000 was made tc
the United States Government ir
the years since the debt agreements
were conSummated.
The interruption in payments
came in 1881 when the whole world
was suffering from an economic
collapse that began in October, 1929
The British had loaned to the other
governments on the Allied side dur
ing the World War a sum about
equal to the credit which America
had extended to England. France
on her part, found herself unable
to repay England because Germany
defaulted on reparation payments
Feel Bankruptcy Pinch.
1t was the economic burden of the
World War which Europe was
struggling to meet. and when the
depression came. the governments OF
Britain and France felt that pinch
just as much as if they had gone
bankrupt. None of the privately
contracted loans was defaulted
American investors did not lose the
principal or interest on the bonds
foated by the British and French
in the United States. When the
collapse came, priority was given to
private loans rather than loans of
the American Government.
In any bankruptcy or receivershir
proceeding looking toward the re-
organization of a private business
certain claims get priority over 9TH
ers. Many claims are wiped out
because there are not enough assets
to cover debts.
In this instance, when the Ger
mans began to repudite private and
public debts-including payments
due the United States for postwar
expenses-the British and French
had little time to rearrange their
finances in order to make new
debt plan with America. They had
counted heavily on receipts from
Germany to help them pay Amer
lea. Also between 1881 and 1888 the
chaotic conditions in Germany led
to the rise of Hitler, whose arbitrari-
ness started a new series of expenses
growing out of rearmament needs.
Feared for Economies.
The British and French peoples,
moreover, never have understood the
American viewpoint on the debt
question. They have never taken
issue with the American jibes
charging them with default on an
honorable debt. The Allied peoples
always took the view that they were
being taxed more heavily than the
American people ever had been, and
that it was simply not possible after
1881 to keep on paying the war debt
annual installments without break
ing down the entire internal econ
omy of their countries.
But the most important argument
heard abroad was rarely understood
by the American people as a whole
The British and French felt that
the last war was a war in which
the United States entered for di-
rect reasons-attacks by Germany
on American shlpping-and that
subsequently the issues were pro-
claimed to be those of war to
make the world safe for democracy
If the war was a common cause,
the Allies felt that the sacrifices
they made in holding the line till
the United States could come over
should have meant something to the
American people. America is cred
tied by the Allied governments with
having come at a decisive moment
Only here and there have malcon-
tents attempted to picture the Brit
ish and French peoples as unap-
preciative of American aid.
Blood or Dollars.
But the real point is that the
British and French lost 100000 in
dead and many millions more
wounded before America could get
across the Atlantic. From April
1917. for instance, till almost whole
year later, the American Army did
not get overseas and into action
on a substantial basis. The Allies
held the line and took the biggest
losses while waiting for America to
reach France with help. The aver
age British and French citizen con-
siders that if the last war was a
partnership fight of all democracies
against autocracy, the contribution
In blood was far greater on the part
of Britain and France than dollars
were from America.
During the last war and in the
period that followed, the average
American would not concede that
the British and French were fight
ing for American democracy. Only
in the last few weeks has that argu-
ment struck home. Today Ameri-
cans would gladly give money il
they could avoid giving lves-l1
only to hold at bay the ruthless
force that threatens democracy
very HE. Ialk Oh IeluoiAiS W oio
in materials or credits now because
the Allies didn't pay the last wal
debts is heard less and less now
adays. Republicans and Democrats
on Capitol Hill are beginning to say
the old war debts should have peer
Cancelled or adjusted oong ago and q
new basis arrived at. Unfortunately
American political leaders IN botf
parties have found it to their ad-
vantage in the last decade to far
isolationist flames /of antagonisn
against Britain and France, ano
only now it is coming to be seer
that the financial and economic sit
uation of Britain and France would
have permitted a better job OF re-
armament preparation for the pres
ent war if it had not been for the
clumsy way all the democracies, in
cluding the United States, handled
the debts growing out of the last war
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