WAR DEBTS

Southland Times, Issue 20012, 28 October 1926, Page 4

WAR DEBTS

A VEXED QUESTION. FEELING IN THE UNITED STATES. TWO SCHOOLS OF THOUGHT. (From Our Correspondent.) San Francisco, October 6. It is difficult for a New Zealander who has not lived in, or travelled through, the United States to get a correct view of this great land and its cosmopolitan population. Because the Americans who visit the colonies speak the English language, and are usually of Anglo-Saxon stock, and also because of the early settlers coming over from Great Britain, there is a natural feeling that the people of the United States are of English descent or sympathy. This is not the case. Every race and colour under the sun are to be found within the borders of Uncle Sam’s domains. The unrestricted immigration of several decades made this country a haven for the undesirables of Europe, and it may be guessed that some foreign governments gave a sigh of relief as they watched their nationals leaving for the new land. Groups of foreigners, i.e., not English, have located in States and cities and preserve their native tongues, customs, newspapers, and all else that binds them to their own peoples. These groups, in individuals, are not counted by the hundreds of thousands, but by the millions. The negro problem needs no description. There is criticism in English-speaking lands because the United States did not get into the world war earlier than she did. If the critics had lived in this land during that period, they would not express themselves without that knowledge which comes from close study at first hand. Many millions of the people have come from, or are descended from, the countries that were fighting the allies. Their power, financial, political, and otherwise, was, and is, tremendous. It was generally thrown on the side of the central powers. For instance, a few years back the group registration of voters in San Francisco showed that the Germans were ahead of the Irish, and topped the list. New York, Chicago, and other large eastern cities, would show surprising results, if analysed in this respect. OPPOSITION TO WAR. Millions of the residents of the United States did not believe in the high motives that governed the English theory of participation in the war. They said time would prove them to be correct. To-day they calmly discuss the new alignments in Europe as proof of their reasonable doubt a short time back. They allege tiiat they came to the United States to escape the turmoil of Europe, where sometimes small countries start a conflagration over night. It is not unfair to say that this large group is not over-friendly with England, and that there are, in addition, a goodly number of those who know no other tongue than English that have the same view, partly because of the home rule problem in Ireland, and also because of the “jingo” element that is still alive on the war of the revolution issue. The foregoing facts should “seep ins Before the United States joined the allied forces, there was a strong sentiment against participation, and there was decided opposition to the manufacture of munitions and the furnishing of supplies for shipment to the allies. The latter course was said to violate neutrality and would prolong the war. DIFFICULTIES IN THE WAY. Long before Congress approved President Woodrow Wilson’s declaration of war, soldiers had to be placed around water, light and power agencies that cared for the needs of the different cities. If this had not been done, poison would have been used. Under each railway bridge was a soldier to prevent the use of dynamite, for trains passing overhead would frequently carry nationals of the allies going back to join the colours, or supplies for the front would be en route. Glass was sometimes found in bread. Spies were active. It was a continual state of watchfulness that saved lives and property, even when the country was neutral. When war came and the Liberty Loan Bond drives were organised, the same want of unanimity prevailed, though not so openly. The fair-minded reader, approaching the, problem-of the war debts, must concede an unusual situation in the United States, and one that does not, and could not, affect a homogeneous people. TWO OPINIONS. It is customary to have two divergent views taken of any question of importance. The American people are divided on the war-debt problem. There are those who think it would be a gracious act to either cancel or substantially reduce the amounts to be paid by foreign governments, and thus show an interest in the rehabilitation of world affairs and concede that the United States is not a materialistic nation, despite all its wealth. This group is also of the opinion that the United States did not take up the fight against militarism until long after other countries had given so much in blood and treasure for the common weal. And out of the war fortunes were made and prosperity resigned. The country now has a chance to take an international lead, as an outcome of the exercise of vision and a realisation of the stupendous issues confronting mankind. Those advocating the opposite course say the money of the people was collected, in part, to loan to foreign governments desperately in need, and that millions of citizens in poor and average circumstances responded to the financial call. They need the money they loaned. The debts have been substantially reduced, following conferences with the representatives of other governments. It is bad policy to repudiate debts honestly contracted, and the failure of some European countries to tax themselves is held responsible for the present ill- , feeling against the United States, whose people both pay heavy taxes and work.

There is one thing that both sides agree on, namely, the feasibility of reconsidering the whole question later on, if sufficient facts are advanced to warrant that course. FORMER WAR SECRETARY STIRS THOUGHT. After the man in the street thought the matter had been settled, Newton D. Baker, of Cleveland, Secertary of War in the Wilson Cabinet, announced his views in favour Of a mutual cancellation policy, stating that the United States is not justified, either in morals or in a long view of its own best industrial and commercial interests, in adhering to its present policy with regard to the settlement of the inter-allied debts. He believes the countries associated with the United States in the war would be relieved, and they, in turn, ought to require the release of some part of the- burdens imposed upon Germany,. Mr Baker’s views, in part, are as follows—- “ The character of the inter-allied debts is simple. Attempts to divide them up into pre-Armistice and post-Armistice loans, to separate out amounts which were spent in this country or elsewhere, or to divide them into classes based on the things purchased, as, for instance, arms for soldiers on the one hand, and food for the civil population, or money for the maintenance of credit on the other, are worse than useless. “The fact is that not a penny of this money would have been lent by us, or have been borrowed by any of our debtor nations, but for the war. Their need for it arose out of the contributions and sacrifices made by them in the war, and our willingness to supply it arose out of our belief that it was necessary, to our own interest, to sustain their military efficiency until the Armistice, and their economic stability after the Armistice, in order to prevent a collapse which would have cost us vastly more than the money which we supplied. “Nor is it very important to inquire whether at the time of the making of these so-called loans there was an expectation that they should be repaid. The question is not what did somebody think in 1917. but what is it wise to think now?

“In the modern world, industrial nations are so integrated, by mutual investment and by trade relations, that political isolation is an illusion. The overseas investments of the people in the United States now aggregate perhaps eleven billions of dollars, and we are investing annually overseas at the rate of a billion a year. “Europe to-day is, and long has been, our best customer, consuming of our total exports more than double the amount of any other continent. In a very real sense, therefore, European buying in the world markets is a decisive factor in maintaining the price of our entire home product. It is l not conceivable that- the rest of the world will continue to trade with us during sixtytwo years in which every one of them would have its own industries burdened by crushing taxes. “Every country in the world has had the experience of a vast and hopeless debtor class, and has realised that every so often it is necessary to wipe off the slate and start afresh as in a Scriptural year of jubilee. This releases the energies of men, restores hope, cures political disorder and gives life a fresh rtart. The analogy applies perfectly to the present international situation. The United States needs, not dollars, but a confident, prosperous and peaceful world as a field for its industrial and commercial operations. That condition can not be brought about so long as we vinntinue to exact payments up to the capacity of the debtors to pay.” On Mr Baker’s devoted head have fallen bricks thrown from every direction, quite a compliment, under the circumstances. And he has been highly praised by many who think in terms beyond the day.

The New York Times thinks “the whole question of war debts will have to be considered anew,” while admitting that “exSecretary Baker is stronger in diagnosis than in prescribing a remedy.” The New York World finds the former Cabinet officer's views “refreshing, particularly after so much obfuscation and juggling of figures at Washington.” The New York Evening Post states “Mr Baker’s connections indicate plainly enough for whom he speaks. His article is published in Trade Winds, a magazine issued by one of the big banks of Cleveland. Mr Baker himself, is the big corporation lawyer of Cleveland. His article is interesting as showing the solidarity of bank opinion on this subject.” The Milwaukee Journal avers “What Mr Baker says boldly is what a good many men are thinking and saying privately.” The powerful and country-wide Hearst papers condemn Mr Baker and urge that the war debts be collected.