AMERICA AND WAR DEBTS.

Evening Star, Issue 19549, 6 May 1927, Page 6

AMERICA AND WAR DEBTS.

If America is to take tho cash of the war debts settlement it seems hard that Groat Britain, bearing the main burden of it, should be robbed of even tile credit of her sacrifice. \et that is the effect of an elaborate statement made by • the Secretary of the American Treasury (Mr Mellon), against which the British Government has politely protested. President Hibben, of Princeton University, and 11(3 members of its faculty, followed the example of Columbia University a few weeks ago in issuing an appeal for a reconsideration of the debt settlements made and pending. Their plea was based on the grounds that America could not afford as a nation to impose tremendous burdens of taxation for the next two generations on friendly countries at the very tunc when tho United States itself was “amassing a national fortune.” Their case aaginst the Shylock role was not so much that it was bad morality as that it was bad business, an objection to it which it was probably expected would bo more likely to produce an impression on the American Government. The underlying notion was interpreted by one journal to be that “we risk losing more in markets, in international security, and in goodwill by taking our money than wo will gain ” —a real danger of the “ payment based on capacity,” which means easily to the last ounce of capacity, system. Mr Mellon is more concerned about immediate advantages, and in his anxiety to minimise even the sentimental appeal of tho professors’ case it is regrettable that he should have made a reply to them in which he misrepresented entirely the effects of the settlement for the British taxpayer. “ Tho fact is,” he stated, in a three-column pronouncement which appeared in the American Press, and was cabled at less length to British and other newspapers, “that all our principal debtors are already receiving from Germany more than enough to pay their debts to the United States,” and he quoted annual figures that were supposed to bear out this contention. But tho contention was wrong, and the figures, in regard to Great Britain at least, mistakenly cjSoted. The British Press lost no time in correcting the statement, and Mr Churchill, Chancellor of the Exchequer, gave the true figures, showing a very different position for Great Britain, in reply to a question in the House of Commons. Now the British Government has sent a Note to Washington pointing out the inaccuracy of the American official statement. Britain did not receive last year, and will not receive this year, from Germany more than half the amount of payments which she made, or is making, to America. Over the last eight years all the amounts she has received from Germany as reparations, and from wartime Allies, compared with what she has paid to the United States, leave a balance on the wrong side of 129£ million pounds. And though to receive more from those sources than she is required to pay as a debtor makes no part of Great Britain’s policy, that balance is never likely to adjust itself, oven in the sixty years for which the debt and reparations settlements have been framed. Mr Mellon’s mistake was apparently made in treating all the receipts of the British Empire as if they were receipts of the British Government, and that was not his only error. But the American Secretary has not welcomed the correction of his statement, which suggested that the annual tribute to rich America, where taxes are being refunded as nnneeclcd, makes no burden for the impoverished British taxpayer. He prefers to resent, by implication at least, tho presentation of the true facts to him by the British Government as an interference in a “ purely domestic discussion,” as if no misrepresentations made to his own people, involving an injustice to their debtors, and broadcasted of necessity to all the world, could bo a concern of the latter. If anything more was needed to put tho American official attitude in tho worst light, it would be supplied by Mr Mellon’s dwelling on the comparatively small claims made by America herself on Germany for reparations. It was not long that she was a combatant in the war, and she certainly had the best of it, from a financial point of view, during the much longer period that she was a neutral. The next word can be left to the American professors, who will not lack a correct knowledge of the facts in continuing their dispute with Mr Mellon.