Title: Alied debts : supplementary rebuttal notes
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Title: Alied debts : supplementary rebuttal notes
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Affirm. SUPPLEMENTARY REBUTTAL NOTES Pag
January 1, ,.X033

RESOLVED: THAT THE UNITED STATES SHOULD AGREE. TO THE CANCELLATION
OF INTER-ALLIED WAR DEBTS'

#1. THE CHRISTIAN ,SCIENCE MONITOR, December SO;, '1932.p. i4. Editorial
All the money in..the world' would not have won without men.
Human lives were the great cost of the war. And it might.be worth
while to remember at this time that American..casualities were o:anly
350,000 as against 9.,qO,000 .fo:f Russia,' 6,000,000 for. 'ranc~e, 53,
000,000 for Britain. and 2, '00 ,000 for Italy.. Of .these millions,.;
a large share were. lo's-es sustained by the allies in holding the
"American sector" during the first year.the United'States VWas in:
the war and could. send only'dollars to the front;.'
#2 ...THE CBRISTIAN SCIENCE .MONITOR, De.dember -20, 1932,:p. i4Editorial.
'The loose assumption that Europe'i a-sklng Americai to pay. -the
whole cost "of, '"a .ErBopean .war" also' ignores .coii.prete-ly' t'hb 'fact
that Britain alone' has already' repaid n'ear-ly.- 2,000,,.QO,.OO,. or', ,
roughly, .,'the ful. present value. .of-..'the'- goo'ds'he b r6toW:ed -at- .wa:-'-"
time prices..:..Ti.s:: i:s:not of: course, including interest, ;butt there
is more thati:a. -little: doibt' of the dece-c fr ocharging'intees.t
on'this debt. The allies can collect no interest on the men they
"lent! .to match Ame4rca s::rmy .6f dollars. :

#3. THE CHRISTIAN, SCIENCE.iv:ONIT.0R, Dec;em)ber 20, : 1932,' p.14.Editorial
One. of. the -co'mmbnes.t results of this ..obsession WWith' dollars.,..
is the widespread m1s.conception. that the United States is the only.
creditor.in the war-debt, equation, and. the :related :mistake that
the European nations are seeking to shift ;the whole cost of .t.he .war
onto the Ameri'can taptpayer. .Sujch thinking. l.eave.s-ou:t-of'account,
of course, 'the vast war, bills paid by- the', allies. before 1917, .
when the American G.overnment first granted credits.
S. In, August 6f.~that.y.ear. It.was officially estimated in. Washing.
ton that. the World'War had already cost tbe..participants $88,0000,.
000,000, of which $57,.090,00,000 had-been spent by the-allied-and
$26,000,;000000 hy Great Britain along. ,.Thes.e figures included. ....-
no war damages, whi.ch.,were incalcuiabie and from which'the United' ".
States was-virtually'f~ree. And. the costs 't the: allies, 'of course,
after 1917 were 'by.n'q. means covered by. the 410',.QO,000,000 borrowed-
from America .

#4. THE NEW' YORK TIMESDecember 5,192',p...6,,Text of the address
by Chancellor of thb .Exchequer Neville Chamberlain 'n the House .
of common; -.December 14, 1935. ..
,I .should -lik to emphasize that the whole of that expenditure
was for pur-oses of war. The whole of.it..was expended on goods.
purchased in the United Stpte.s'--on.munitions, food and clothes.
Whether..it 'took-.the.form, of munitions, which were blown.to pieces
in Flanders, or.food,.', which was.' ohsumed by our people and soldierss,
or of uniforms, which were worn to rags in the course" of the 'fight-..
ing, the whole of that ,e.xpkenditure ':vas j.u:s't as..norr-produc'tive as
if it had. been spent entirely on tapr1ik. r' artillery o'r shellss,
There was~..nb. addition .tothe--wealth 't this. country .and Veaily there
was no distinction "as. to. .the varioust'.waTd services upon which the
money.was exDetded.'







SUPPLEMENTARY REBUTTAL NOTES


#5. PORTLAND (Maine) EVENING EXPRESS,December 2,1932,p.9.The War
Debts, by Frederic J.Haskin.
Most of it was spent right here in the United States and went
into the Dockets of American workmen, employed in munition factories
and into the profit account of American corporations whic-h, in turn,
paid enormous excess profits and income taxes which led hundreds
of millions right back into the Treasury, whence it had issued in
the first place.

#6. THE NEW YORK TIMES, December 2,1932.p.12. The Text.of the
British note on debts to the United States, delivered to Secretary
of State Stimson by Sir Ronald'Lindsay, British Ambassador, Decem-
ber 1, 1032.
In respect of the debt to the United States Government payments
have been made amounting to $1,352,000,000 (L278,000,000 at par)
of which $202,000,000 (L42,000,000 at par) were in respect of the
principal of the debt as funded, Furthermore, in addition to the
payments under the funding agreement his Majesty's Government have
paid $233,000,000 (L48,000,000) in respect of war debt.s before fund-
ina, and the, have repaid in full both the loan for the purchase
of silver amounting to i122,000,000 and the debt of $16.000,000
for relief supplies to Austria. The total of these.debt payments
which His Maiesty's Government have made to the. United States since
the war amount to the sum of $3,063,000,000 (L629,0000,000).

#7. THE CHRISTIAN SCIENCE MONITOR, December 6, 1932,p.16.Editorial.
It should be remembered in America that the Hoover holiday,
as a general vacation from intergovernmental debt payments, was
most unwelcome and highly expensive to France. It led directly to
Lausanne. And at Lausanne France gave up $85,000,000 a year in
addition to reparations.which'had covered two-thirds of the debt
payments to America. Naturally, perhaps, France feels that a holi-
day originally imposed upon her should not be. ended now after she
has granted leave to her own debtors which can hardly be recinded.

#F. GUARANTY SURVEY. Guaranty Trust Company of New York, Novem-
ber 28, 1932, p.5.
'There has been a general tendency on the part of practical ob-
servers to recognize that reparations, at least in.so far'as they
affect capacity to pay, are related to the war debts. This connec-
tion was recognized in the Young plan, and, in the opinion of
many students of the problem, was tacitly admitted in President
Hoover's proposal for a suspension of reparation and debt payments
in 1931n32, and again in the joint statement issued by President
Hoover and Premier Laval of France, after the conference at Wash-
ington a year ago.

#9. THE NEW YORK TIMES, December 2, 1932.p.12. The Text of the
British note on debts to the United States, delivered to Secre-
tary of State Stimson, by Sir Ronald Lindsay, British Ambassador,
December 1, 1932.
Reparations and war loans, represent expenditure on destruction,
Fertile fields were rendered barren and populous cities a shattered
ruin. Such expenditure, instead of producing a slew and steady
accumulation of wealth, destroys in a few hours stored-up riches of


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British payments to America, and at the'same time-deliberately
making it impossible for Great Britain to express an opinion in
the matter. Mr. Hoover ca 11s this "a bold course"; to us it
seems perilously nearer a piratical"breach' of faith.'

#7. THE NEW YORK TIMES, November 25, 1932. o.2.col.6.P.J.
Philip.
Here are people reputed to be the most practical in the world
making an absurd and inopportune decision n that will open for
the world a new era of mistrust and let loose new panics. Can
they not understand that by accepting the request of Britain,
Belgium and France they would have helped to bring back pros-
perity, which is founded onpsychological as much as economic'-
principles? Despite What the President says, there is a direct
tie between the Lausanne agreement and-what has'been'asked of
America.

#8. NEW YORK TIMES,,November 26, 1932. p.7, Neville Chamberlain's
speech at Birminghamn, .England,, November 25th.
We went to Lausanne in the earlier part' of the summer and
we there came to certain agreements regarding reparations 'where-
by all payments' of reparations were' suspended for the present 'and
a settlement was made which was believed to be the final and
ultimate solution of the problem. At the same time we suspended
all payments from our former allies respecting war debts to
this country and I thihk we all hoped it would not be necessary
ever again to reopen the question.
But we never contemplated a state of-things in 'which we might
be asked to make payments equivalent to another 'shilling in the
pound upon our income tax while at the same time we were receiv-
ing nothing from our debtors. That would be a position which
alike from the point of view of Justice and from the viewpoint
of the possibility of maintaining the prosperity of our industry
would be absolutely insufferable.

#9. .THE NEW YORK TIMES, Novemberr 25,' 19532, n.2.col.6. P.J.
Philip.
If no acceptable settlement is reached because of the re-
fusal of the United States to envisage an equitable solution
it must be recognized that the American Government deliberately
assumes the responsibility of destroying all'that has been ac-
comolished with the assent and often on the initiative of the
President of the United States. It will be 'the end -of the
Lausanne agreement and a return to the Young Plan with all its
consequences

#10. NEW YORK WORLD-TELEGRAM, November 25, 1932. p.25. Heywood
Broun.
Least of 'all do I like the most recent pronouncement of
Governor Roosevelt. It may lease voters to say, "The -indebted-
ness of the various European nations to 'our government has no
relation whatsoever to reparation payments made or owed to them."
This can serve as a soothing slogan to the "every last nickel"
boys, but it just isn't good sense. No fair and comprehensive

The Debaters Information Bureau, 3 Horton Place, Portland,Maine
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SUPPLEMENTARY REBUTTAL NOTES


view of international finance can fail to note how closely these
factors are linked.

#11. BOSTON. HERALD, No ver-ber 25, 1932. p.2. Deputy Henry Haye,
who accompanied former Pfemier Loval to Washington when M.Laval
had his con-fere-nce with President Hoover.
"I remember a conversation between Ogden L.Mills and M.
Laval at Washington in which M. Laval said that if Germany did
not pay not a penny would be paid America".

#12. NATION 135:524-5. November 30, 1930. Maxwell S.Stewart.
SFrom one point of view there has been no cancellation.
According to the funding agreements, the principal is to be paid
in full with interest. Moreover, since payments, are distributed
over 62years, the debtors are obliged to pay, including interest,
a total of 22 billions, or mr e than twice the amount originally
advanced by the United States.

#13. NEW YORK TIMES; November 26, 1932. p.14.. Editorial.
The' settlement with Great Britain w-s a harder one that with
other nations. Is it strange, in view of conditions in that
country, that Great Britain, our chief customer, should hone for
better treatment? Is it surprising that France should feel,
after she forgave reparations on tle plain hint in the Hoover-
Laval communique despite her colossal losses in the World War,
'that the next move is up to the United States? If, by our atti-
tude toward Great Britain and France, the hope of Germany to
progress is destroyed, what barrier will remain against the
spread of communism?

#14'. NEW YORK TIMES, November 26, 1932. p.7. Prime Minister
MacDonald's speech at Retford, England, November 25th.
We have already written off 60ner cent of the debts due is
and owing to the fact that we, funded our debt to America some
years before we funded the Continental debt due us we have in
fact paid up to -date i200,,000,000 more to American than we have
received from Europe. We have done it uncomplainingly; it's all
in the day's rub.

#15. COMMONWEAL, November 23, 1930. p.97. Aliver McKee,Jr.
With the payments spread, as they are, over a period of
62 years, these debts must inevitably remain a point of poten-
tial friction and irritation. They will affect Europe's atti-
tude toward the United States, place barriers on trade and good-
will, provide a football for the politicians, and give perennial
texts for demagogues, both here and abroad.

#16. NEW YORK HERALD TRIBUNE, November 14, 1932. p.6. Committee
for the Consideration of Intergovernmental Debts. "- T-
James W. Angell, Professor of Economics, Columbia University.
Ernest Minor Patterson, Professor of Economics, University of
Pennsylvania.
Edwin R.A.Seligman, McVicarProfessor Emeritus of Political Economy
in Residence, Columbia University.
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Frank W. Taussig, Henry Lee Professor of Economics, Harvard
University.
Rufus S. Tucker, Consulting Economist, New York City.
Jacob Viner, Professor of Economics, University of Chicago.
John Parke Young, Professor of Economics and Finance. Occidental
College. ,
It must be recognized'that there is no way, short of going
to war, by which the United states can force the full payment of
these debts if the debtor nations are either unwilling or unable
to pay. If we insist upon full payment our debtors may either
default on payments or repudiate the debts. As Secretary Mellon
said in 1926, "Those who insist upon impossible terms are in the
final analysis working for an entire repudiation of the debts.

#17. HIDE AND LEATHER, November 19, 1932. p.4. Editorial
There is no way to convince the people in European countries
that the United States can not afford to cancel, much less p-st-
pone indebtedness. -Showing them the government deficit and the
certainty that the -oresent revenue laws are insufficient---falls
.upon ears that refuse to hear.
It is nt as much dishonesty -s ignorance. and the one is as
difficult to deal with as the -ther.

#18. THE NEW YORK TIMES, November 25, 1932. p.2.Col.4-5
Throughout London tonight, on posters on the, streets and in
huge type across the front page of Lord Beaverbrook's evening
newspaper, it is proclaimed; Britain Will Not Pay, "
To the clamor of Lord Beaverbrook''s newspapers has been
.added the powerful voice of Viscount-Rotthmer's Daily Mail and
tonight almost in idential terms "The Daily Mail and The Daily
Express declare "it is impossible .for Britain to pay the United
,States.

#19. THE NEW YORK TIMES, November 11, 1932. p.4. P.J.PHilip.
In Parliament there is obviously trouble brewing for what-
ever government may be in office when the time comes to ask it
to vote the necessary credit of 500,000,000 francs (nearly $20,
000,000) with which to make the Dec.15 payment.

#20. CHRISTIAN SCIENCE MONITER, November 25, 1932. p.3. Moniter
Bureau in Paris.
There is hardly a paper in Paris today that does not pay
in effect, "No payment can take place till the Chamber of Deputies
sanctions it. And there is not a Deputy in the Chamber who would
vote for payment."

#21. NEW REPUBLIC, November 23, 1932. p.32. Editorial.
Default would injure confidence, freeze many private foreign
debts which might otherwise be good, and prevent qny prompt renew-
al of the flow of short-term credits and investments abroad. It
would injure rather than improve foreign markets for American goods.
These markets are important to us, and especially to wheat and
cotton growers:
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#22. LITERARY DIGEST, November 26, 1932. p.2. Quotes Walter Lipman.
in the Philadelphia Record:
The repudiation of a great debt, or even default on it, by
the oldest and most respected financial power in the world would
impair public and private obligations everywhere.

#23. NEW YORK HERALD TRIBUNE, November 25, 1932. -p.2.Mark Sullivan.
Default on these debts might have an unhappypsychological
effect on the credit structure everywhere in the world.

#24. CHRISTIAN SCIENCE MONITER, November 16, 1932. p.l. Erwin
D. Canham, Staff Correspondent of the Moniter.
Default would mean an end to any hope of eventual partial
collection of the war debts. It would also destroy the bargaining
utility of the debts as an American means of bringing armaments
down and loosening up international trade. Directly, too, default
should presumably damage currencies of the defaulting countries,
and thus make them proportionately poorer customers of the United
States.

#25. NEW YORK HERALD TRIBUNE, November 14, 1932. p.6. Committee
for the Consideration of Intergovennmental Debts. (See Item#16.)
Furthermore, the act of rep udiation or default, in itself,
would seriously impair international 1 confidence. These conse-
quences would still further hinder our commercial and financial
relations, not only with Europe, but with other parts of the
world as well.

#26. NETWYORK TIMES, November"20, 1932. p.30.
Professor Charles R. Whittlesey of the department of economics
of Princeton University, in."Facing the Facts, a symposium of
current economic problems recently compiles by twelve Princeton
economists.
"Senator Borah has urged that we modify the debt agreements
only upon the condition that European nations reduce armaments,"
"If such- an, agreement is possible, this constitutes the strongest
argument for cancellation, A reductionof only one-third in our
expenditures for arms would compensate for what we should forego
on debt receipts.
"We should be economically ahead to the extent we reduced
armaments beyond this figure or that such reduction lasted longer
than t-he debt agreements will otherwise do.

#27. NEW YORK WORLDsTELEGRAM, November 25, 1932. p.26. Dr.Wilford
J. Eiteman, Albion College.
Battleships are made.from steel and labor services and not
from bank credits. Hence, to say that Great Britain is spending
$527,000,000 on armaments is only to say that Great Britain has
in her possession this amount of steel and labor services which
she is devoting to armament purposes instead of the payment of
her debts.
No informed person doubts that Great Br itain is able and
willing (when America'will agree) to pay her war "ebts with steel
and labor service, but the steel companies and the laborers liv-
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ing in the United States would prefer that she keep her steel
and labor services in the British Isles, and to make certain
that she does so the United States Congfess has passed a high
and formidable tariff walls

#28. NE2 YORK TIMES, November 20, 1932. Section 8.p.l.Charles
Merz,
Armaments are purchased and maintained with domestic cur-
rency and domestic credit- under the terms of their agreements
with the United States, the debtor nations are required to pay
their debts in gold. If they lack gold, they cannot acquire it
merely by canceling orders for a t ousand cannon being manufact-
ured in domestic factories or by stoonig construction of ten
battle cruisers being built in domestic shiDyards. For no new
gold would be created by these economies; and for debtor nations
lacking an adequate reserve of gold the problem would still be
one of paying their debts to the United States by acquiring cred-
its in goods, despite our tariffs.

#29. NEW YORK WORLD-TELEGRAM, November 25, 1932. p.26. Dr.Wilford
J. Eiteman, Albion College.
As long as.the United States does not want British steel
and labor services it cannot legitimately object to the uses to
which Great Britain puts them, at least not on the grounds that
such a use renders her plea of, bankruptcy illogical.
Great Britain's inability to pay arises from the fact that
she has nothing that we want, and not that she .has nothing al all.

#30. CHRISTIAN CENTURY; November 23, 1932. p.1249.Editorial.
If the debts are included on the agenda of a World economic
conference called for the purpose of sweeping away the.whole
economic aftermath of the great war, the people. of the United
States would, we believe be willing to go to the limit in sacri-
ficing their creditor rights.

#31. NEW REPUBLIC, November 23, 1932.. p.32,.Editorial.
The London Economist presents some interesting figures on
the possibility of payment of the December 15 instalment from
Great Britain. Whereas the annuity paid in 1923 represented a
value equivalent to 6 months exports from Britain to America
at that time, the .payment due this year represents 4 years'
exports at the present rate. For how many years, could Britain
pay us every year, the value of four years' exports? At the
current rate of exchange, the half-year's interest, plus prin-
cipal instalments, equals about i 30,000,000. In.the last 6
months for which figures are available, Britain purchased goods
worth L44,000,000. To balance against these imports, she export-
ed to us goods worth only 18,750,000/

#32. CHRISTIAN SCIENCE MONITOR, November 14, 1932.p.14.Editorial.
By far the. chief debtor is Great Britain. Of the $125,000,000
falling due in December, $100,000,000 is the British quota, or 80
per cent. Payment of this large sum is faced by three complications;
First, no help is obtainable any more from German reparations,
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which were virtually wiped out in July; secondly, the burden has
been intensified both by the general facto of the enhancement
of the value of money and by the particular' actor of the British
fall off the gold standard, which would make it necessary for
London to find 30 per cent more sterling to buy the same dollar
remittances- and finally, no provision has been made for payment
in the British budget.

#33. NEW YORK TIMES, November 26, 1932. p.7. Prime Minister Mac-
Donald's speech at Retford, England, November 25th.
The British Government felt that governments of common sense
ought to come together to discuss this intricate economic problem
and come to an agreement which would be satisfactory and enable
the world to go round again on its economic axle.
The way to begin is to free the world from the crushing leads
and impenetrable entanglements of war debts which, while legal'
operations, are tantamount to economic madness and under the con-
ditions of these payments have done as much as the war did to im-
poverish the nations, both those paying and recieving, to ruin
people and to turn millions of men and.women on the streets with
bodies steadily starving and minds being steadily darkened.

#34. CHRISTIAN SCIENCE MONITER," November 19, 1932.p,16.. H.B.Elliston.
Some dent in this deficit is made by indirect trading. That
is, Britain sells goods to third country, which in turn sells
goods to the United States and turns over the dollars it received
to Great Britain, Or it makes up part of the difference.in the
sale of services. There are no statistics available for either
item, but it is common knowledge that all forms of international
economic activity have declined, and the conclusion must be reached
that in order to pay L30,000,000 in debt installment plus L35,000r
000 in the direct trade deficit, current income would not be
sufficient..

#35. CHRISTIAN SCIENCE MONITER, November 19, 1932..p.16.H.B.
Elliston.
This means that Britain would have to dip into the government
equivalent of the little black bag. First, as to gold. Payment
of the debt installment alone in this manner would involve a drain
of roughly one-sixth of the total metal in the Bank of England's
vaults. But the United States does not want gold. It has so
much nowadays that its surplus is nonrevenue-earning. Every whip-
load, in fact, is worse than an idle addition to an iclh store;
it is a positive debit item, in that it is equivalent to the
depreciation of foreign ability to buy American goods.

#36. THE NEW YORK TIMES, November 25, 1932.p.2.col.5.
There are only four ways whereby Britain can meet her in-.
stalment--first, by currency at a fixed rate of exchange, which
is excluded by the terms of the debt agreements; second, by gold,
which would diminish the coverage for the British note issue,
demoralize sterling and make it impossible for Britain ever to
return to the gold standard- third, by goods, if the United
States, should reduce her tariff, although.only- '11,000,000 worth
of British goods were sold in America in the first nine months
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of the present year, and fourth, by dollars, which Britain has
nothing like the number required and has no means of obtaining
them.

#37. NEW YORK TIMES, November 26, 1932.p.7.
Reflecting the deepening oessimrism in the foreign exchange
market over the effedt upon Gr at Britain's finances of either
a default of cash payment of the December war debt instalment,
the pound sterling fell 4 5/8 cents yesterday to ;3.202, the
lowest price since 1920.
As has been the case ever since the wfnr debts question was
reopened, the cheaper the Dound became the less it was wanted.

#38. CHRISTIAN SCIENCE VMONITER, November 19, 1932. p.16.H.B.
Elliston.
Any sudden cheapening of British goods', which follows from,
a lapse in sterling, concerns all Britain's competitors, and Ger-
many in particular. The Reich country is now struggling grimly
to sell enough goods abroad to permit continued payment on its
foreign debt, including :42,000,000,000 held by Americans. Only
three :weeks ago, when British exchange dropped.after staying steady
for some time, word came from Berlin that in that center the event
was regarded as-almost theequivalent of another British fall off
the gold standard.

#39. CHRISTIAN S6IENCE MONITER, November 19, 1932.p.16.H. B.
Elliston.
When narrent transactions'do not balance, and payments
have, nevertheless, to be made across the exchanges, the law of
supply and demand states that the oversupply will make the pound
cheaper. For several weeks the British have been reputedly buy-
ing dollars in preparation for wardebt payment. The dollar ster-
ling exchange hps dropped under the pressure. But few observers
feel that they have bought their full quota of dollars. So, if
they have not donw so, and are compelled to make up their purchases,
the exchange would drop again,

#40. CHRISTIAN SCIENCE MONITER, November 19, 1932.p.1.6.H. B.
Elliston.
How much in dollars is Britain earning? Like every other
country, its receipts from.foreign trade and from the supply of
services to foreigners, such as space on British ships, have
fallen drastically. According to the statistics of the London
Economist for the last six months,. great Britain bought from
the Unit d States goods worth nearly L44,000,000. Against this
import Britain sold to the United States goods worth L8,750,000
leaving a deficit to be paid for in other ways of L35,000,000.

#41. NEW YORK HERALD TRIBUNE, November 14, 1932.p.6. Committee
for the Consideration of Intergovernmental Debts. (See item #16.)
Great Britain, for example, with the -ound worth $3.50 instead
of $4.86, must pay 80 pounds more for every thousand dollars trans-
ferred to the United-States. As, a matter of fact, the present
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disorganization of foreign exchange and of internatio nal trade
has been due in great part to the difficulties of making large
international payments not only on government loans but on
private obligations ax well.

#42. CHICAGO DAILY TRIBUNE, November 25, 1932.p.2. Sir Robert
Home, a former chancellor of the exchequer,(quoted);
Asfar as purchases from the outside world are concerned,
Britain is in a happy position. She is able to buy from sterling
countries and therefore really has nothing to fear." he said.
"The result of America's action," has been to force us in
on ourselves and, after all, we are in a very powerful position.
We are the center of a great sterling area which represents more
than half the trade of the world at present. We are the leading
ship in the convoy."

#43. THE NE'~ YORK TIMES, November 25, 1932. p.2.col.l. October
Tax Yield off $29,500,000 in France.
Paris, Nov.24--Tax receipts for October issued today show
a further heavy deficit compared with the budgetary estimates.
Receipts for the month dropped 21 per cent below expectations.
October was the seventh month of the fiscal year, which
begins in April. Its budgetary deficit was by far the greatest
this year.
For the whole seven months the deficit now is about 2,750,
000,000 francs, confirming fears that there will be a total
deficit in the 1932 budget of about 4,000,000,000 francs. This
deficit is not included in the 12,000,000,000-franc deficit al-
ready conceded for the 1933 budget.

#44. NEW YORK HERALD TRIBUNE-, November 14, 1932.p.6. Committee
for the Consideration of Intergovernmental Debts.(See item #16)
Wholesale prices the world over have declined more than a
third since the debts were funded. Obligations of this magnitude
can ultimately be paid only in goods and services. To pay every
thousand dollars of the debt as originally funded, therefore,
our debtors must now sell half as much again in commodities.
In other words, the burden of their payments has been increased
50 per cent.

#45. NEW YORK HERALD TRIBUNE, November 15, 1932.p.17.Walter Lippman
Fifteen years of experience have now demonstrated that the
system of huge political debt paym nts can be made to work just
as long as the ultimate creditor i.s willing to lend his debtors
th6 money. That means that it canmo t be made to work at all.
For debts paid out of borrowed money are not really paid. Our
debtors owe us more money today than when they started to pay us
their debts.

#46. NEW YORK HERALD TRIBUNE, November 14, -1932.p.6. Committee
for the Consideration of Intergovernmental debts.(See Item #16)
Through the virtual cancellation of reparations from Germany
under the Lausanne agreements, our principal debtors will lose a
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source of revenue which in the past has been more than sufficient
to pay their war debt installments. The economic depression and
the cessation of American loans to Germany after 1929 have pre-
vented her from obtaining the exchange which rendered it possible
for.reparations to be paid to our debtors, and for the latter to
meet their installments due the United States Treasury.

#47. THE NEW' YORK HERALD TRIBUNE, November 14, 1932. p.6. Committee
for the Consideration of Intergovernmental Debts. (See Item #16)
The extreme difficulties of the debtor governments in rais-
ing money from their citizens in the present world depression
have also had an important effect upon their capacity to pay.
Their revenues are now being obtained only with greatest difficulty
from already over-taxed peoples, while their fiscal problems
have been further aggravated by the cessation of reparations.
Tax levels in some of the debtor countries have already been
raised to the point of diminishing returns. The burden of tax-
ation in all of the debtor countries is much heavier than in
the United States. This is true even where per capital taxes are
less than ih the United States, because the per canita income is
far lower.

#48. NE'" YORK HERALD TRIBUNE, November 14, 1932. p.6. Committee
for the Consideration of Intergovernmental Debts. (See Item #16)
Through this improvement in business, tax revenues would
automatically increase, while the burden of taxation upon the
people would be reduced. Taxation weights heavily, less because
of high rates than because of how income. Even a partial return
to the prosperity of 1929 would produce added revenues from in-
come taxes far inexcess of tine installment due this fiscal year
on the .war debts, even on the basis of rates prevailing at that
time, which were. substantially lower than those in force at present.

#49. THE NEW YORK 'TIMES, November 11, 1932. p.l.
While this uncertainty regarding what Great Britain and
France will do about their Dec. 15 payments was troubling State
Department officials, the Treasury Department announced that
Greece had failed to make a payment of $444,920 on her debt,
which was due today, and that Hungary had served notice that she
would be unable to meet her December parent of $40,729. Germany
has already received a postponement of $7,800,000 owed on mixed
claims and costs of the army of occupation.

#50. PORTLAND SUNDAY TEiLGRAM, November 27, 1932. Section D.P.8.
Frank H. Simonds.
Another familiar argument applied to France add Britain is
that they could cede territory. One of my indignant critics the
other day berated me for not recognizing that the British -as
owners of Canada could easily use the Dominion to discharge the
debt.. The French islands of .Martinique and Guadeloupe are often
suggested as means to settle the sums due. But of course both
islands-are on .full equality with all portions of European France,
represented sliie in.Senate and Chamber. For the United States

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to be asked to cede Maine or Vermont to Canade to discharge a
debt would be a similar proposition.

#51. PORTLAND SUNDAY TELEGRAM, November 27, 1932. Section D.p.8.
Frank H. Simonds.
No. country will cede its own people to another country to
discharge a debt as no Western parent will'sell a child into
slavery to Day a-bill. No country will reduce its armam nts
when it fears attack to please a creditor nation and, further-
more such reduction would not proVide any funds for debt payment.

#52. NEW YORK TIMES, November 20, 1932.Section 8, p.l.Charles
Ierz.
This problem of transferring wealth across national frontiers
seems to many advocates of a change to.furnish a compelling reason
for revision of t'e debt agreements. The United States die not
have to solve this problem when the war loans were originally
made. For we did not loan pounds to England or francs to France.
We did not laan gold. Our gold reserves, in fact, increased by
$249,000,000 while we were making loans. What the United States
loaned was munitions, cotton, wheat, flour, textiles and tobacco.
The debtor nations borrowed these goods at prices which reached
their peak in the years from 1917 to 1920. Prices have subse-
auently fallen by more than 40 per cent. The burden of the
debts'has increased accordingly.

#53. NEW YORK WORLD-TELEGRAM, November 25, 1932.p.27.Sir Walter
Layton, British Economist.
There is only one escape from this dilemma, and that is for
the creditor country to lend back the payments it received, but
this only, puts off the.evil hour, and when the day of reckoning
comes--as the case of Germany showed last year--the demand for
repayment of debts that has been piled up over several years
brings about collapse.

#54. NEW YORK HERALD TRIBUNE, November 14, 1932.p.6. Committee
for the Consideration of Intergovernmental-Debts.(See Item #16)
In the last analysis, intergovernmental debts, like private
international debts, must be naid by transferring property rights
in goods and services from the debtor to the creditor. This
means that the debtor nation can pay its debts only by building
up an export surplus of goods and services which the creditor
nation must be willing to receive. The foreign commodity trade
of the debtor countries, however, which has always been recognized
by the Debt Commission as one of the chief indices of the nations'
capacity to pay, has fallen to a value only 60 per cent of that
of-1929.

#55. SPECTATOR (English) November 11, 1932. p VIII. Arthur W.
Kiddy.
The United States, the world's chief creditor, defied the
doctrine of a settlement of debts by an exchange of goods and
services, raising its tariff walls so highasto prevent its debtors
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from effecting settlement otherwise than by exchange remittances
and ultimately by huge shipments of gold, a development which
has played no small part in bringing the trade of the world to
its present deplorable state.

#5,6. CHICAGO DAILY TRIBUNE, November 25, 1932. p.2. John Steele,
Chicago. Tribune Press Service.
The British nress today sent out a barrage sympathizing
with the United States over the "terrible difficulties" she will
inflict upon herself if she takes the money. Led by the London
Times these British papers point out that if Britain sends $95,
550,000 in gold to America-she will be unable to buy any more
Ameri.can goods and may be compelled, however reluctantly, to put
a discriminatory tariff on American goods, to be paid in gold or
dollars in order to get the gold back.

#57. SPRINGFIELD(.Massachusetts) DAILY REPUBLICAN, November 26,
1932.p.12. R. L. Barnum. Wall-Street Corresoondent.
Every decline of a cent in sterling means that everybody
throughout the world having maturing obligations payable in
sterling gets just so much less. A business man in this country,
for example, who sold goods to England payable in sterling when
sterling was selling only a few weeks ago at #3.4.6 would get
only $3.221 if a draft from London was deposited in his bank here
at the opening this.morning. The decline of from 4.4.86 to $3.222
in sterling means a declhe of..33 per .cent from the par value of
sterling. Every decline of a cent in sterling means just so much
more demoralization in.the world's connodity markets. Our o.wn
farmers and business men inow what this means.

#58. CHRISTIAN SCIENCE MONITER, November 19, 1932. p.16. H.B.
Elliston.
The question has no longer merely a technical interest. It
affects every cotton planter and every wheat farmer. It affects
every person who is concerned with the price of commodities
entering the world market. For the experience of the past
year -f fluctuating exchanges shows that any decline in sterling
is reflected in a decline in .the commodities in which either
British buying or British trading plays a part.

#59. THE NEW YORK TIMES, November 27, 1932. col.8.p..28. Report
of Committee of Chamber of Commerce of the United States on War
Debts. I
SILAS H. STRAWN, Chairman
JULIUS H. BARNES
WILLIAM BUTTERWORTH
CHARLES CONNELLY
H. I. HARRIMAN (ex officio).
LEWIS E. PIERSON
Colonel WM. COOPER PROCTOR
H. :R:. .SA'FFORD
I'ELVIN A. TRAYLOR
For the fiscal year 1931 actual payments received from the

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debtor countries amounted to 4236,000,000 or about 5.6 per cent
of the total expenditures of our government for that yea.

#60. NATION, 135:491. November 23, 1932.
Our national income in 1929 was estimated at $84,000,000,000.
0 n the basis of present indices of trade and employment, that
income appears to have shnunk-to a present rate of certainly not
more than $56,000,000,000--a loss of at least $28,000,000,000
a year. In other words, we are losing $100 a year through depress-
ion for every dollar owed us annually in war-debt payments.

#61. BOSTON HERALD, November 26, 1932. p.15. Edson B.Smith.
Weekly Business Review.
It is becoming understood more and more by thinking people
that there is a very definite relationship between the interna-
tional phases of the present situation and the heaviness i n
commodity prices in the United States. More and more people
are coming to understand that as we force our foreign debtors to
acquire gold exchange to meet their payments to us we in effect
set into operation a train of events which makes gold more valua-
ble. As commodity prices in.gold countries are expressed in
terms of golds, this business of making gold more valuable makes
everything else less valuable. This depre sion is essentially
one of price. A definite turn for the better will come when
pressure to accumulate gold ceases.

#62. NEW' YORK WIORLD-TELE:;: ., November. 25, 1932.p.27. Dr.
Nicholas Murray Butler.
While we have been insisting on payments from abroad to be
applied through our budget in reduction of taxation, our annual
income tax collections have diminished by some four times the
amount of the annual debt payments.
In.other words the acceptance of these debt payments has
been a burden and not a blessing, a loss and not a gain. If we
got rid of them trade would revive and the farmer, the wage
earner, the industrialist and the transportation company would
again be able to earn a livelihood.

#63. NEW YORK TORLD-GELEGRAM, Novei~ber 25, 1932.. p.27. Sir Waltr
Layton, British Economist.
Our case in no way differs in principle from that which
was repeatedly made a year ago by C ancellor Bruening.on behalf
of Germany. If international payments are on too large a scale
to be met in the ordinary commercial way by goods or services--
and it is obvious that in the present state of trade this is
the case--they can only be made by means which will deplete the
reserves of the country concerned, undermine confidence and throw
the economic system of the world into disorder.

#64. HAROLD J. MOULTQC and LEO PASVOLSKY. War Debts and World
Prosperity. The Brookings Institution, 1932.
While the obliteration of the w'O r debts would not solve
all- the manifold difficulties under" v-'ich the world is laboring

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ecanomioe analysis leads unmistakably to the conclusiml that the
restoration and maintenance of sorld prosperity will be rendered
much easier if the disorganizing effects of the war-debt payments
are eliminated once and for all.

#65. HAROLD G. MOULTON and LeO PAVOLSKY. War Debts and World
Prosperity. 1932.
The arguments that our export trade is unimportant and has
no real bearing upon our prosperity sounds plausible, but is fund-
amentally erroneous. The assumption that domestic trade could
be expanded simultaneously with the curtailment of foreigh trade
is without foundation. On the contrary, a decline in foreign
trade inevitably carries with it also a decline in domestic trade.
There never was a more complete economic fallacy than the one now
prevalent--that this country can turn its back on Europe and
prosper by so doing.

#66. CHRISTIAN SCIENCE MONITER, November 16, 1932 p.14. Editorial.
The most recent plan comes from the well-known Swiss bankers
Dr. Felix Somary, who shows that some commercial contract might
be acceptable to the debtors as a compensation for revision.
He proposes that the debtors take the initiative in pledging to
purchase from the United States important products for a given
period of time in return for easement of the debt burden. The
agreement would bind the debtors to buy these products at the
present world prices and in quantities equaling the American ex-
ports to these countries in the years 1922-1926.
It may be protested logically that the world's tariff fences
might stand in the way of any such arrangement. However, such
contracts wouldpresuppose reciprocity and the working out of the
details in regard to sDecific co-modities to be trafficked in.


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