WAR DEBTS

Southland Times, Issue 20228, 13 July 1927, Page 12

WAR DEBTS

FRANCE AND AMERICA. PARIS BANKER’S BOOK. San Francisco, June 1. The minds of thoughtful Americans have been disturbed for a second time during the past month on the question of the war debts. The tumult attending the controversy between Winston Churchill and Mr Mellon, arising out of the doubts cast by Professor Murray Butler and other leaders of education on the equity of the debts, has hardly died down, when a new and disturbing influence emerges from the publication in Paris of the book by Francois Marsal, prominent Paris banker and Finance Minister of France during a large portion of the post-w’ar reconstruction period. M. Marsal has offered America some very bitter pills to absorb. The bitterest is a candid declaration that France should never pay her war debt to the United States on any such basis as the Mellon-Berenger agreement now operating, and that France’s signature is no more binding than America’s signature to the Armistice, conditions of which provided for Germany’s payment of w r ar damages. At the conclusion of his book, M. Marsal asks for an arbitration of the debt issue between America and France by the League of Nations, by the World Court or the Vatican, or else an all-round conference for the adjustment of international indebtedness left by the war. If it is possible to be an impartial observer of the issue raised by M. Marsal, one is forced to the conviction that the former Finance Minister’s book would have perhaps contributed m,ore toward the end he seeks had he been more sparing in his indictment of the United States. The New York Times reviewer remarks, however, that the book adds something new to the oft-re-curring debate—and it will recur for sixty years, with increasing volume and bias against payment—in the emphasis M. Marsal lays on the commitment he says America involved herself in, through the Armistice terms. NEVER LEFT THE STATES. M. Marsal says that the money, except for a small part, never left the United States, but was used there to purchase supplies. “The inter-Allied debts form, all together, the reciprocal financial engagements made under pressure of a common danger, and at different dates, by nations which entered the war at different epochs, and which were forced to throw into the furnace of war whatever they could find as a means of defence—men, material, money, and credit.” He does not question the money borrowed in America before the United States entered the war, in 1917. He thinks America’s joining the Allies as associate involved certain obligations, and Ke expresses grave doubts that America has lived up to them. The writer argues, from Article 19 of the Armistice, that “the United States thereby engaged, by a solemn convention, never repudiated, to obtain from Germany reparation of war damages. . . . The United States demanded execution of the Armistice conditions, in so far as they were concerned. They take their part for their troops’ occupation. But how about reparation for damages?” Asserting that America has not assisted actively in efforts to make Germany pay, M. Marsal contends, that France is entitled, first, to demand that America’s bill be revised; second, that a parallel between debt payments and German reparation payments be admitted.

He develops, with a good deal of apparent mathematical logic, that France was charged exorbitant prices for war materials. He alleges that the profits against France amounted to 43 per cent, of the total, and insists that there be a revision that shall also account for war taxes paid to the American Government, which, he thinks, under the Berenger agreement, France would pay twice. “Wise, from a business point of view, but unfair, from the point of view of justice,” is one of the many sharp comments by the author, in dealing with America’s attitude towards the debt.