WAR DEBTS

Evening Star, Issue 21078, 15 April 1932, Page 9

WAR DEBTS

MODIFIED CANCELLATION SCHEME ** MR AL. SMITH'S PROPOSAL Press Association—By Telegraph—Copyright. WASHINGTON, April 13. Mr Al. Smith, in addressing a group of distinguished Democratic leaders at the annual Jefferson Day dinner, proposed a modified debt cancellation scheme. “ Let us say to the nations of Europe who owe us money, ‘ We will forget about it for twenty years, and, not only will we do that, but we will write off as paid each year 25 per cent, of the gross value of American products which you buy from us.’ This, in effect, means that if a nation purchases 100,000,000 dollars’ worth of our cotton wo will forget about 25,000,000 of its indebtedness, and the same for wheat, fruit, and tobacco, or any of our manufactured products.” Mr Smith pictured the United States as “ clamouring for the payment of debts which we know cannot be paid.” The proposal was enthusiastically applauded. PLAN CREATES INTEREST GOVERNMENT RETICENT. NEW YORK, April 13. Mr Smith said that the present method of demanding repayment was “losing for the farmers, manufacturers, and working men of the United States more billions of dollars than the whole of the European debt. This plan should start from the ports of the United States. Flood American-made goods into the homes and factories of our neighbours across the sea, and we will in turn make concessions to them on debts which wo know they are unable to pay. That will remove the menace to business throughout the world, which is the greatest curse in the present uncertainty.” The Washington correspondent of the 1 New York Times ’ states: "Mr Smith startled his listeners. His plan has created intense interest, but there has been a minimum of open discussion. This is due to its bluntness and to the fact that the Democratic political group seemed to feel that it was not a matter for quick opinion. The plan, however, met with hostile comment from Government circles. Members of the Senate for the most part refused to talk about the proposal. Several of them informally called it “ impracticable,” but said that they might discuss it on the floor of the House.

The issue is somewhat confused, owing to the political situation, there being dissension between the Smith and Roosevelt factions in the Democratic Party, with the possibility of an open break between them. How far this may overshadow the problems of statesmanship involved in Mr Smith’s proposal remains to be seen.