Evening Post. FRIDAY, MAY 6, 1927. DEBT SETTLEMENT

Evening Post, Volume CXIII, Issue 105, 6 May 1927, Page 6

Evening Post. FRIDAY, MAY 6, 1927. DEBT SETTLEMENT

When the Biiti^li Debt Funding Commission went to Washington in January, 1923, to confer with a similar body appointed by the United Stales, the "cordial opening speech" of Mr. Andrew Mellon, the United States Secretary of the Treasury, was reciprocated in the same tone by Mr. Baldwin, who, as Chancellor of the Exchequer, headed the British Commission. Under these happy auspices a settlement of Britain's war indebtedness of £850,000,000 to the United States was arrived at with very little difficulty. An arrangement which committed Britain to the payment of about £100,000 a day for 62 years naturally excited some resentment, but it was regarded by an overwhelming majority of the British people as inevitable, and accepted without serious demur. There was no thought of whining or of suing for favours. "We don't like it, but we're going to see it through" was the attitude of the nation, and that altitude it has consistently maintained ever since. When the matter last came up for full discussion in the House of Commons, Mr. Hilton Young expressed the feeling of all parties when he said that it would be an evil day when any British Minister "goes cap in hand to the Government of the United States and asks for remission or for more favourable treatment of these war debts." Reviewing that debate, the "Times" (27th July, 192G) spoke for the nation as follows:—

Tho simple fact about tho British debt to tho United States is that it is settled. There can bo no question of our going back,upon the-settlement, or of attempting to evade an obligation deliberately undertaken. . . . That being so, thero is no sort of use in allowing this difficult bygone question to become oneo more tho subject of an irregular, protracted, and aimless controversy between tho two countries. Wo pay according to'tho bond; the United States'receives the payments; tho continued exoeution of tho agreement in an important factor of stability in ■tho developing inten'ourßO botwoon Great Britain and the United States, aud has rendered possiblo friendly cooperation in many directions. - . . Mr. Churchill Ims now gone so far as to make a'public retort to ouo of Senator Borah's tirades. When things have reached that point, it is really necessary to call a halt.

Mr. Churchill would certainly have been wise to leave Senator Borah alone, but we cannot suppose that when iho Secretary of the United States Treasury makes such a statement as lie did in his reply to the plea from Princeton University for a reconsld-» ■ eration of the debt settlements, the "Times" would consider that Mr. Churchill was wrong in taking nolice.of it, or even that he would have been right to ignore it. Following the lead given by 42 professors of Columbia University, the President of Princeton and 116 members of the faculty had argued (hat it would be to the interest of America no less than of her debtors to mitigate the terms of the arrangements which she has made with some of them and is endeavouring to make with the others. This evidence iji support of President Hibben's contention that "the enlightened opinion of the country calls for a revision of (lie debt settlenients with our former Allies'' was received with much satisfaction throughout the British Empire, and nowhere can the satisfaction have been keener than at the Brilish Treasury. But'though the Princeton pica und Mr. Mellon's arguments in reply must have made Mr. Churchill the controversialist eager to take a hand in the fray, Mr. Churchill the Chancellor of the Exchequer properly recognised that officially he had no fight to interfere in a domestic controversy in another country. But, in so far as the reply of the United States Treasurer contained what purported to be a statement regarding Britain's financial position which Mr. Churchill believed to be seriously inaccurate and to imply a reversal of her repeatedly declared policy, it was surely his official duty to put his country right, And this ho seems to us to have done in' a calm, cool, and dispassionate manner which in view of his strength and his weakness is entirely admirable. Mr. Mellon gave the Princeton professors a reply which filled three newspaper columns. But for Mr. Churchill's purpose a material part was as follows:—

The fact is tluit nil of our prinulpul ilubtors aro already receiving t'roln Gji'rmiiny moro than enough to puy their debts' to ■ tho United Htnfces. . .. .

Under (.lie agreement with I'Viuiee, Great Britain will receive from France approximately-" 71,000(000 dollars this year; from Italy approximately 10,000,----000 dollars; from Germany, approximately 72,000,000 dollars, and will pay us .100,000,000 dollars, or, in otlier woi-dHj Great Britain will recoivo this year from her dobtors 2,000,000 dollars more than sho pays us. NoXt year Great Britain will roeeivo from Franco, ltuly, and Gorimuiy a total of 175,----0.00,000 dollars. Groat Britain will pay üb-100,000,000 dollars, leaving n balance of 15,000,000' dollars'. In. 1028-1020, Great Britain will receive 231,000,000 dollars, und will, pay us 101,000,000 7o2Bojpot&. 11 °redit l)lUanC° °f On the merits.the rejoinder of President Hibboti will seem to most British readers very powerful. According to Mr. Mellon, In; says, wo in this United States are to get 'the biuiellt of the reparations doming from Gai'nijuiy through our allied debtors and designed originally to repair-damaged of tho war. The nations which suffered cannot u^e the reparations for the re-,

pair of their own destroyed property, but must pass it on immediately to their ally in the war, the United States.

But officially Mr. Churchill was only concerned with the specific references to the financial position of Great Britain, and regarding these he says that on points of cardinal importance Mr. Mellon's statements "do not correspond with facts as known to His Majesty's Government." And these facts, he adds, "are published by the Agent-General for Reparation pay•ments, and are fully available to tlie United States Treasury." The conflict between these facts and Mr. Mellon's is so amazing as to be almost incredible. A single example must suffice. According to Mr. Churchill's figures, Britain will receive from German reparations and inter-Allied war debts a total of £25,000,000 during the current year against a payment of- £33,000,000 due to the United States. These figures leave Britain with a deficit of £8,000,000 in a year when according to tlie Secretary of the United States Treasury she will have a surplus of 2,000,000 dollars! No attempt is made by the American Government to account for this and the other astonishing discrepancies revealed by the British Note. He merely says that "the British figures which differ from his (Mr. Mellon's) were used in an accounting sense," whatever that may mean. The British Treasury is denied the courtesy of any further reply on the ground that

the Government of tho United States regards the correspondence between Mr. Mellon and Professor Hibben as purely a domestic discussion, and does not desire to engago in any formal diplomatic discussion on the subject.

"The unfortunate impression created by the issue of Mr. Mellon's statement," which the British Government desires to have removed, has been aggravated tenfold by a piece of diplomacy which we prefer not to characterise.