The Stratford Evening Post With which is Incorporated "THE EGMONT SETTLER." (Established 1890.) THURSDAY, JULY 21, 1932 America's Problem

Stratford Evening Post, Volume I, Issue 498, 21 July 1932, Page 4

The Stratford Evening Post With which is Incorporated "THE EGMONT SETTLER." (Established 1890.) THURSDAY, JULY 21, 1932 America's Problem

THE world must have great patience and sympathy l with America in the position in which it has been placed. Without any direct encouragement from its responsible political leaders an assumption has grown up that, as soon as Europe settled its reparation problem and agreed to a substantial measure of disarmament, America would remit, or at least greatly reduce, the European war debt. It is true that American statesmen have instanced reparations and expenditure upon armaments as reasons for explaining why the request for debt remission might be regarded by Americans with cynicism- It has quite logically been pointed out that the 2000 million owed to the United States by the European Governments only equalled the total of reparations, or one-third of the amount spent by Europe on armaments. There are two possible conclusions to be drawn from that argument—one, that since the European countries have saved in reparations, and, if the success at Lausanne is repeated at Geneva, will save in armaments, amounts equal to their debt to America, they should now be able to pay these debts. The other conclusion, and the one upon which the world has been assuming, is that America, satisfied with the sacrifices made by Europe, will wish to throw the amount of the war debts into the general pool as its contribution towards the world's economic recovery. It is easy enough for other nations to advise America that it should remit their debts for America's own good. The economic argument that America loses more in trade than it gains in gold payments is probably true, and the recognition of its truth is being forced upon America. But there are enormous internal difficulties involved in any process of war debt remission. Even those who are loudest in demanding that it should be done have not yet been able to show any practical wav in which it can be done. i ■ •>

The money which the allied Governments owe to America was raised through the American Government from the individual citizens of America, who received interest-bearing bonds to the amount of their lending. These bonds are United States Government Stock in which millions of American people have invested their money. They are their capital and the interest upon them is their livelihood. No Government could possibly wipe out the value of that stock and so leave the bondholders penniless. The Government would have to issue new stork for the war loans, making the interest and sinking fund a charge upon rcvenve to be raised from fresh taxation. With a budget deficit this year of 600 million the American Government is in no position cither to float a big internal loan or to add fresh interest payments to the charges against ordinary revenueSympathy should be all the keener for America because, however great the difficulties in (he way of war debt remission or reduction, it is quite certain that the means will have to be found to overcome them. It is little use blinking the fact that, so far as the Continental nations are concerned, it is fast becoming a case of reduction or default..