Evening star., 1944-08-13

Z $#$= $$*= " IL II LII
The question raised by the National
Association of Manufacturers this week
as to the future of lease-lend aid to
Great Britain is regarded by officials
here as symptomatic of an increasing
public interest now in postwar financial
adjustments. It Is an interest, they
agree, which is perfectly natural, but
one which, If based on faulty informa-
ton or narrow nationalism, can be a
serious political menace to the healthy
readjustment of world economy.
So far as the specific query OF the
NAM is concerned, Acting Secretary of
State Stettinius appears to have an
swered it by saying that Britain has not
officially raised the question Of postwar
lease-lend. At the same time, he pointed
out that existing legislation permits the
continuation of American assistance un-
til June 80, 1945, unless Congress should
pass joint resolution terminating it
earlier. Even if Germany should sur
render before the end of this fiscal year,
be furnished the British to carry on a
joint war against Japan.
Viewing a total of American lease
lend assistance to our Allies which now
approaches $40, 900 900 900 gross-though
the net amount will be reduced by re-
verse lease e-lend-both business inter-
ests and the public are asking: How will
this vast sum be repaid9 Business also
is quite naturally concerned as to the
final disposition of large amounts of
capital equipment and machinery which
America has sent abroad for wartime
use but which might turn out consump-
ton goods to compete with it in foreign
trade after the war.
Discrimination in Interest.
The end Of the World War found
Americas Allies owing it approximately
$4,000, ,000, 900, an amount which was
scaled down to around $11 900 000, 900 in
the various settlements which were con-
cluded in the 1905. Aside from the FORE
eiveness Of some interest which had ac-
crued between the end of the war and
the signing of the settlements, the prin-
ciples followed were those of normal in
ternational banking.
The $4,000 600, ,000-plus debts of Great
Britain and France and the $4,000 600 900
debt Of Italy were founded over a long
term of years, although at highly
discriminatory rate of interest. Britain,
under the Baldwin agreement, paid an
average rate of 81. per cent. France,
settling later under the Mellon Beranger
pact, settled for per cent. Italy finally
was let off with extremely lenient av-
erage interest of little over l per cent.
The complete breakdown of this ar
rangement under the stress of high tar
IFS, monetary restrictions and dwin-
ding trade during the acute depression
years of 1930-l933 is matter of history.
Yet inquiries reaching the Government
now indicate that the economic philos-
ophy expressed by Calvin Coolidge in his
famous phrase, We'll, they hired the
money, didn't they?" is still alive in
American thinking.
Normal Settlement Unlikely.
Problems of postwar finance to be
faced by the recipients of lease-lend,
particularly Great Britain, which had
received some $685. 900 900 of the total
as of December 81, l943, rule out any
settlement along strictly commercial
banking lines, Government economists
agree. The same reasoning applies to
Russia, which has lost a large part of
its industrial plant in the west, due to
the scorched-earth policy followed when
German armies moved through the
Ukraine and North Caucasus.
Reports of the Lease-Lend Admin
istration, the House and Senate Com
mittees on Foreign Affairs and speeches
OF State Department officials all indicate
an understanding that demands for pay
ment cannot be divorced from liberal
economic policies which will allow the
debtors means of meeting their obliga
tlons. They also recognize the principle
that, at least so far as munitions like
tanks, planes, artillery and shells are
concerned, their use by Allied soldiers
have contributed directly to the defense
Va eAAS SAAAeCo StdeCo dllu 81, perhaps,
should not be paid for at all.
With the end of the war in Europe in
sight and with Allied forces winning VIC
tory after victory in the Far East, the
question of postwar settlements is be-
coming daily more pointed So it may
be useful to set out some of the guide
posts to the thinking that is now going
on in the administration.
Burden on Commerce Banned.
Article VII Of the master lease lend
agreements is the fountain-head of lib
eral" economic thought toward the post
war settlements 1t provides that the
terms and conditions, of the final ad-
justments shall be such as not to bur-
den commerce between the two coun-
tries but to promote mutually ad-
vantageous economic relations between
them and the betterment of worldwide
economic relations"
The article continues with what some
economists regard as a Magma Carta of
the sort Of economic liberalism which