Evening Post. WEDNESDAY, DECEMBER 30, 1925. DEBT SETTLEMENTS

Evening Post, Volume CX, Issue 156, 30 December 1925, Page 4

Evening Post. WEDNESDAY, DECEMBER 30, 1925. DEBT SETTLEMENTS

If the "Popoio d'ltali" correctly reflects the opinions of Signor Mussolini, the settlement of the AngloItalian debt which Italy hopes for ia one under which Britain would receive much gratitude and little cash. "England," the Milan newspaper is reported as stating, "would give inestimable proof of her gratitude to Italy if she accoriled her conditions more favourable than those granted to Italy by the United States." This may be taken as a hint that England, in any circumstances, is unlikely to obtain more than America has accepted—and America has not driven a hard bargain with Italy. The Italian-American agreement indicates that for an original debt of £329,600,000 America will receive £48.1,400,000, spread, over 62 years. The principal is to be paid in full, and interest is to be according to the Italian capacity— none 'lor the first five years, then one-eighth of 1 per cent, for ten years, and so rising fractionally in successive ten-year periods until iu the last seven years 2 per cent, is charged. This is a more generous agreement, than has been accorded by America to any other debtor nation. How generous it is was shown by the Washington correspondent of "The Times" when the settlement was announced.

According to the American calculation, he wrote, whereas four , and a quarter per cent, interest was decreed by Congress as applied to each foreign debt, the terms of settlement actually reached are thus shown: Great Britain is paying 76 per cent, of what Congresß would have asked, Belgium will pay 45 and the Italians only 25i per cent. France, it is said, was asked to pay CO per cent., but offered only 40.

The percentages were believed by the American! Debt-funding Commission to. represent a fair calculation of national capacity, and it was even said that they did not err on the side of generosity to Italy. "But if Britain is to begin her generosity where America left off there is not much space for what the "Popoio d'ltali" terms "a brutal calculation from a business standpoint." That might be all ve/y well if generosity in the same measure had been extended to Britain by her own creditors; but it was not. Britain pledged her oredit principally to finance her Allies in the War. The money she borrowed from America was largely lent again to those Allies who were not strong enough to obtain from the, United States all that they needed upon their own credit. If she now settles with Italy upon terms similar to those in the Ital-ian-American settlement she will pay about 2 per cent., for the privilege of being an intermediary. That is the pena\ty she has in* curred as a guarantor. In these circumstances, Britain may well say that she has already corrected the brutal business calculation "by the high political, diplomatic, and historic vision," and she cannot well afford to make the vision much higher if the Italian interest has to be lower.

The "Pdpolo d'ltali," however, appears quite willing to come down from this lofty plane when discussing the gold deposited in England. That must be kept apart. It was given as a pledge, and pledges must be restored.' The "brutal business' 1 view, however, is that pledges are restored when they are redeemed, and redemption involves settle* merit of the debts contracted when the pledges were given. The other material consideration which the "Popoio d'ltali" drags into the discussion is the sharing of the spoils of victory. "Italy," it is stated, "received no colonial mandates, whereas the English received a large proportion of the booty of victory." What Italy did receive, however, was that which she most desired —territory on her northern frontier more valuable to h^r than any tropical forest in Africa or islands in the Pacific. The value of the colonial mandates is not always so great as this Italian, journal assumes. Probably Britain would be willing at the present moment to transfer to Italy, if she'could honourably do so, that part of her "booty of victory' which is represented by the mautiute over Irak.