WAR DEBT PROBLEM

Evening Post, Volume CXVI, Issue 2, 3 July 1933, Page 14

WAR DEBT PROBLEM

WHAT IS AMERICAN VIEW ?

(To the Editor.) | Sit;, —The best minds in America generally condemn the policy of U.S.A. with regard to war' debts. European countries had considerable vested interests in America before the war.- Today the Allied countries in the war have none, and owe; : U.S.A.; millions.; Great Britain had some two thousand millions invested ■in U.S.A. before 1014. Today she owes America 850 millions. Great Britain's national" debt in 1914 was under 700 millions; • today it is over ;■ 7000 millions. U.S.A. came into the w.ar'on April 6, 1917. By: that.time Great .Britain had loaned to her Allies 1200 millions, aud before the war ended had advanced a total 2Ms thousand millions which by the Balfour gesture she offered to cancel if America would cancel Great Britain's debt of 850 millions. •• If that offer had been accepted byi America she would not have had millions of working men unemployed today. America wanted.gold. She got it in'surfeit, and the economic. balance of the.world was,completely upset, and still is:; hence the World's Economic Conference. ■; . . .■ ■. '. The politicians' minds are not the best minds ia any country. It takes five years' training to make'a carpenter, but anyone becomes a politician in-five minutes! The politicians have had to call in the trained niinde'of bankers, financiers, and economists, to help them bring an unbalanced world of trade and commerce back to nor? mal. The difficulties have created Dawes Plans, Young Pacts, conferences, moratoriums, and the Lausanne Agreement, but the politician still .'meddled, still messed, and still muddles. The. Lausanne Agreement was the most hopeful of them all. Sis months before Lausanne the American Congress in approving a moratorium of war-debt payments to U.S.A. stipulated: ''It is hereby expressly declared to be against the policy of Congress that any indebtedness, of foreign countries to the United States should be in any manner cancelled or reduced, aud nothing, in this'joint'resolution'-shall be construed as indicating a 'contrary policy or as implying that favourable consideration will be given "at' any- time to a change in' the policy hereby, declared." Row prior to Lausanne a body of experts—financiers and i economiarts--met at Basle to find a lasting settlement of reparations and; the scajing of war debts in ; keeping therewith to,end theiworld's economic crisis. After three weeks' deliberations the LauEanue Conference agreed that the reparations due by enemy nations should be cut down from 6400 millions to 142 millions sterling! America was jubilant. "J^ow these .debtor nations of Europe will be able to pay us our money," cried the politicians; but two days later the condition' was cabled to U.S.A. which-made "a satisfactory settlement of the.war debts owed to the United States" essential-to the Lausanne Agreement. And the' visage of the American politician assumed a gloomy aspect.. That was July, 1932. Tbere is no need to pursue tho history of "conversations" on war debts since. They are known to every newspaper reader. It will :-.be interesting to note, ■ however, what the best mind in America thinks, aud has thought, all along of"the war-debt problem. That mind kuows that the European debts'owing'.to U.S.A. can only, be.'-paid for. in goods, which America does not want,-and has. raised a tariff as high as heaven to prevent them coming in. Debtor nations have no" money, and to lend them money to pay their debt as was done by U.S.A. for some years-:is only sinking them further in the mire of debt. If U.S.A. lowers: her tariff wall to admit European goods she embarrasses lier own producers and impairs her ■.industrial activity. 'America would be ruined by free imports. The beat mind in America-says there are .two courses open to ncr: Jo insist :on"payment,to -debt in full and bankrupt ■Europe; or to comply with the Lausanne Agreement and scale down the debts-to'make the worlds' economic recovery possible and speedy., Much has been made of the iiuropean expenditure on .armaments: America ' has spent more on armaments) since the war than any other nation proportionate to population, and has less need for such expenditure. But if a debtor country spends ten millions on-armaments that represents the production of "goods by ber people. If America would accept ten millions' worth of other "goods" the product of the debtor nations' industry, and accept them as' payment, that would be to the good; but America wants money, and how; can a debtor nation pay America unless she has a dollar balance j( in U.b.A. by the purchase of her. "goods." The increase in armaments' provides employment, and that is» why America is epeudmg so much more than any other nation on armaments—she has now most unemployment. The best mind in America eces that tbe payment of war debts by-European countries to America "would further- petrity the productive capacity of her industry, commerce, agriculture, and labour. Yvlint would the adopt.iou of the' Lausanne Agreement mean? Take the ca?e of Great Britain.' Some months ago there was talk of ft "lump sum" payment. In 1923 , the British debt to America was Soo millions. ■ She had paid 259 million*— mostly interest—and the total to be paid extending over eixty-odd years was 2222 millions, interest included. (These figures are calculated at the'dollar at par, but at* present the debt would be at least one-third more.) Apply-the cutting down of reparations, in terms of tbe Lausanne Agreement-to Great Britain's debt, and 00 millions sterling would pay it! 'America has 'legal and moral obliga-tions-in this matter of war debts, bne was a party, to. The Hague Convention that declared for a world peace and the safeguarding of neutral countries. bne assumed responsibilities by declaration in the Great War. and Congress authorised in April, 1917, an advance of 600 millions sterling'to "countries engaged in war with enemies of the United States," and these advances aggregated nearly 2000 millions before the end. But these legal and moral obligations aside, the average American citizen is rapidly coming to the conclusion that her .tariff .wall is a barrier insurmountable to the payment of European war debts. War debts have become today more an American problem than a Europenu one. America is beginning to ask: Is it in the interests of U.S.A. that these war debts should-be paid?—l anl> cte -> J. D. SIEVWIiIGHT.