The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, AUGUST 31, 1927. AMERICAN DEBTS.

Hokitika Guardian, 31 August 1927, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, AUGUST 31, 1927. AMERICAN DEBTS.

It will 1.0 remembered that oarly in the year a statement by members of the Faculty of Political Science. Columbia University, on the war debts problem, was submitted to President Cbolidgo for impartial consideration, and this statement was subsequently endorsed by the Faculty of Princetown University. The statement of the Columbia University Faculty lias reached New Zealand, and the arguments contained therein are irresistible in their forceful ness. “Our war debt settlements have produced distrust and misunderstanding.” states the Columbia document. “When century-old political enemies are yielding to commonsense, ah international financial problem of recent origin whatever its magnitude, should net lie allowed to threaten flic foremost gain in international relations since European nations began. . . Not all our war loans were used diretly for military purposes. Some of them helped to feed and clothe civlian populations. Some provided permanent improvements, useful after the war was over. In the debt settlements we have made insufficient account lias been taken of those differences. The origin of various items in the debts was ignored. In justice, and in reason they should have been considered.” The first formal step towards establishment of a. now basis of debt calculations was the creation of the Funding Commission hv the Act of Congress of February 9th. 1922. According to this Act. the Allies were to pay all debts in full, hut the rates of interest were reduced to 4‘i per cent. In the negotiations with Great Britain, further reduction was found necessary and “capacity to pay” liecante the basis of the subsequent negotiations. The statement points out that for over a. year after the American declaration of war the allied troops almost alone held the enemy in check. This was tho critical period during which Germany brought the whole weight of its power to break the western front. The statement points out that the formula, “capacity to pay," which, in the easo of ordinary debt adjustments may lie applied to the possible benefit of both parties, proves difficult, if not impossible, of just application in tho case of debts so vast as to reach over two or three generations. In most of the debt settlements the period agreed upon stretches forward 62 years. How impossible it is to estimate the relative economic “capacities’’ of nations for so long a period will lie clear to anyone who looks back over the last 62 years.” Tho faculty suggested that an international conference should bo called for a. full and frank consideration of the debt and reparation problems. Another American view of the debt problem was published in the “Saturday Evening Past” (New York) of February 12th. It iwritten by Mr Garct Garrett, a-'l concludes as follows: “Why is site (England) so bitter? For she is bitter. Here is the psychic complication. It is not the debt that makes her bittor. that is impossible. She has made of this debt a symbol, and upon that symbol site projects all those sentiments with which immemoriaUy she has regarded any Power whose competition seriously threatened the supremacy of British trade. In morals and in fact this whole controversy is fictitious. Its significance lies entirely outside the debts. If the philosophy it represents should prevail it would mean that'v.e have been romantically wrong, and England realistically right.