ITS DUCATS mean more to Uncle Sam than the re-establishment of financial peace and health in Europe, say some witty if acrimonious French writers, who remark that the ” Shylock strain seems to predominate in the cross-breeding of Uncle Sam,” as they look with ire on the Refunding Bill which provides that the Allied debt to the United States may not be extended beyond the period of twenty-five years, and at a rate of interest not less than four and one-quarter per cent. America is asking one hundred and thirty-two billions from the Allies, and she loaned them fifty billions, according to the Paris Journal, which exclaims that Europe is invited to pay back within twenty-five years a total of $11,000,000,000. At the present rate of exchange, it is pointed out, this amounts to 132,000,000,000 francs, plus interest accruing during the quarter of a century, and “it is enough to cite these figures to show that they do not agree with any possible reality.” More than this they do not agree with the “most elementary notion of justice which demands of the debtor no more than he has received, ” and this Paris daily proceeds:
“What did the Allies receive? England borrowed from the United States $4,860,000,000; France, $2,750,000,000; Italy, $1,625,000,000; Belgium, $350,000,000; Russia, $185,000,000; and other countries $230,000,000.
“All these dollars were calculated at the arbitrary rate of exchange which was fixt by the war. France got five francs for a dollar, that is 13,740,000,000 francs. If she had to pay back to-day she would have to disburse twelve francs per dollar, that is 33,000,000,000. What will be the exchange in fifteen years?
” Further, this sum is nothing to the total which will be reached if one adds interest at the modest 4% per cent., which the American Senate has fixt. At the present rate the French debt would increase 1,500,000,000 francs per year.
“The evil of the calculation is the more flagrant because the Allies have kept nothing of what was loaned them. These billions have literally disappeared in smoke. Furthermore, the Americans only extended credits. No capital left their territory. It only paid their own countrymen who furnished food and war material to their European companions in arms. In the circumstances the price paid was necessarily high. It gave good profits. It paid high wages.
“Out of 50,000,000,000 francs loaned to the Allies, the real value which left America was perhaps 20,000,000,000, while repayment will need over 100,000,000,000 without interest. That does not seem fair. It does not even seem clever, for such a debt must radically destroy the economy of the world.
“Of that American business men are perfectly aware. Many of them have not even waited for conversation with British business men before seeing that very large liquidation of the debt would be not only just but fruitful. President Harding himself finds that the Senate is charging too high.”
The semi-official Paris Temps reminds Americans that the Treaty of Versailles allows Germany thirty years in which to pay the damage she wrought in the war, and that probably it will take seventy-five years for the strict execution of the Accord of London of May, 1921. On the other hand, the Congress of the United States passes a measure, Le Temps goes on to say, the object of which is to recover within twenty-five years money advanced to “associates,” who bore the burden of the war for thirty-two months longer than America. Insinuations that the action of Congress is aimed to affect French foreign policy or is actuated by German interests, Le Temps brushes aside as being incompatible not only with the character of the men who govern at Washington, but also with the interests of their party and of their country. Yet it insists on the plain right of every Frenchman to have his own opinion on the “exigency of Congress, which can be above egoistic consideration,” and we are told why “these exigencies are to be deplored.” In defining the real debt of the Allies to America, four preliminary problems must be examined, according to this daily, as follows:
“First—The effect of past variations in the exchange rate and future eventualities on the present total of the debt, on the payment of interest and on repayment capital must be carefully considered.
“Second—It must be established whether part of the material bought in America which figures in the American claim was not used by the American forces when in Europe. If that ‘was so, then the European nations which supplied the American Army with war material after having bought it in America, will become in turn creditors of the United States, and compensation must be made between the two debts.
” Third—The financial settlement obviously forms part of the indivisible whole. Justice demands that. Further, the economic and monetary conditions of the world demand that such enormous sums can not be paid on one side if they are not received on the other.
“Fourth—as in the case of all financial settlements between nations, payment of European debts to the United States can only be accomplished by an exchange of merchandise. American consumers, then, must consent to buy more European products than they are doing. We are convinced that they would willingly do so, as the depreciation of European exchange makes European products cheap provided the United States Government voted really liberal laws which would lower the customs tariffs and which would reopen the frontiers to the wines of France, Italy and Germany.
“If the Government of the United States can not make such reform, the balance of payments can only be made by enormous cash exports from Europe. To do that there is only one way, which is both disagreeable and insufficient: The indebted nations of Europe must make an effort to buy as little as possible from the United States.
“The United States is making her reentry into the affairs of Europe. But what comes to us with the signature of the American Congress? A summons to pay both capital and interest, the money which was spent to defend the frontier of Liberty.
” It is not as debtors that we regret this action. It is as friends of America. It is as partizans of peace. But the people of America are generous. Sooner or later we are convinced they will recall the saying that sometimes the heart calculates better than the head.”
Source: The Literary Digest for February 18, 1922