Title: Alied debts : supplementary rebuttal notes
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Permanent Link: http://ufdc.ufl.edu/UF00089364/00005
 Material Information
Title: Alied debts : supplementary rebuttal notes
Physical Description: Serial
Language: English
Publisher: Debaters information bureau
Place of Publication: Portland, Me
Publication Date: February 1933
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Bibliographic ID: UF00089364
Volume ID: VID00005
Source Institution: University of Florida
Holding Location: University of Florida
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Full Text

February 1, 1933.


#1. COLLIERS, January 21, 1933. p.50. Editorial.
We have never taken the pains to discover just what sort of
settlement would benefit us most. "They hired the money, didn't
they?" has been repeated as a complete summary of practical wis-
dom on this subject. As a matter of history, the answer is "No."
They didn't hire the money. They hired munitions, food and many
other commodities but not the money.

#2. CHRISTIAN SCIENCE MONITOR, January 10, 1933. p.l.
WASHINGTON, Jan.10-Debate over the war debt relations of
President Hoover, Congress and the French Government, which flared
up again yesterday in the Senate, is recognized as important in
its interpretation of past events, and as a guide for future re-
lationships between France and the United States.
The Administration spokesmen were able successfully to deny
that President Hoover had made any commitments to Premier Laval
or other foreign officials. But Senator Borah, accepting their
denial, could also establish that President Hoover on three occa-
sions, first with members of Congress, then with M.: Laval, and
last in his message to Congress on Dec.l0, 1931, definitely im-
plied that there would be a reconsideration of the war debts.

#3. BANKERS MAGAZINE. January, 1933. p.3. Editorial.
Actually the problem has now passed out of the domain of
law and ethics into that of economics, or perhaps into that of
international relations in general.

#4. NEW OUTLOOK, January 1933. p.9. Alfred E. Smith.
No government can survive which flies in the face of public
opinion. This has just been proved in France. What shall we gain
if we upset the coalition government in England or the conserva-
tive government in Germany? Does anyone think we shall collect
debts through radical governments which will have as their first
plank complete repudiation of all public debts and perhaps even
private debts to foreign nations?

#5. UNITED STATES DAILY, December 30, 1932. p.3.
America will collect none of the $417,556 in war-debt pay-
ments which were to fall due on Jan.l, according to oral state-
ments made Dec.29 at the Treasury Department.
Both Greece-which was to have paid $130,000-and Austria-
which was scheduled to pay $287,556-have invoked provisions in
their war-debt funding agreements with the United States which
permit them to postpone payment, it.was stated.

1933. p.5.
If they ceased all expenditures upon armaments their ability
to make the debt payments would not be increased unless.the labor
that had been employed upon armaments could be employed in the
production of goods which would be admitted into the United States,


or which might be exchanged for goods: which would be admitted
into the United States. The essential point is that payments of
such magnitude can be accomplished only by transfer directly
or indirectly of movable property of some kind to the creditor

#7. CHRISTIAN SCIENCE MONITOR, January 12, 1933. p.12. W.Y.
Elliott, Professor of Government, Harvard University.
That the debtors do not wish to repudiate in the face of
danger involved to capitalist economy, is evident from the ef-
forts made to meet the payments of Dec.15. Great Britain at
least, will repudiate only as a measure of desperation. But *
with an adverse trade balance of about E50,.000,000 a year for
the first time in her modern history, she is not far from that
degree of desperation,

January 1933. p.6.
The payment reduced the gold Reserve of the Bank of England
to 23.6 per cent of its demand liabilities. The last statement
of the Federal Resei;ye system shows a reserve of 62.7 per cent.

#9, CHRISTIAN SCIENCE.MONITOR. January 12, 1933. pol2. WIY.
Elliott, Professor of Government, Harvard University.
Faced by the prospect of being called on to continue payments
in gold '(now doubled in value since the settlements were made),
or in dollar exchange (which would drive their own depreciated
currencies still lower), it is not to be wondered that the debtors
begin to threaten default, and even repudiation.

#10. CHRISTIAN SCIENCE MONITOR, December 28, 1932&
Immediate effects have always been proportionate to the bas-
ic economic and political position of the defaulting country, and
since France is one of the most solid countries in the world,
precedents would indicate that there is little to apprehend on
world money markets by the latest default.

#11. MIDLAND BANK MONTHLY REVIEW (London) December 1932-January
1933. p.3.
The system of 'paying in gold can be maintained largely be-
cause there is now so little demand for gold and so few ultimate
and involuntary buyers of it, while at the same time the avail-
able supply in the market has greatly increased.---Consequently
the system of gold payments, to America on account of war debt
can be operated only so long as a number of important countries
remain off the gold standard; it defers indefinitely a return
to gold by this country. There can, indeed, be no general re-
turn to gold as long as war debt payments to America have to be
made in the form necessarily adopted by Great Britain last De-

#12. BARRON'S, January 23, 1933. p.21. Sir Walter T. Layton,
L6ndon, England.
In the first place the proceeds of America's loans to Europe
were blown into the air in the form of shot and shell, and there-

Rage 2.



fore did nothing to increase the power of the debtor to pay, but,
on the contrary, diminished it. The investment of British capi-
tal, on the other hand, in building the railways of Argentina
enormously increased the productivity of that country, and has
made it possible for her to pay the 80,000,00 a year due to Argen-
tine Railway shareholders in Britain. In the second place, the
chief-credit6r country concerned in these payments from Argentina,
namely, Great Britain, has hitherto been willing to accept payments
in goods. Although for decades past Britain has sold large quanti-
ties of manufactures to that country, which has been a very good
market for British goods, Britain has constantly imported consid-
erably more than she has exported to Argentina.

#13. CURRENT HISTORY, January 1933. p.418. Bernhard Ostrolenk.
Two things are necessary for a foreign government to pay
its debt; 1) A surplus of income over receipts. The reduction
of armaments by foreign governments would contribute to such sur-
plus. But this surplus of foreign currency must be converted
into dollars or, as the experts say, transferred into the United
States. This transfer can only take place when there is 2) a
surplus of exports over imports from the debtor country to the
creditor country enabling the debtor country to buy the balance
thus created with the surplus funds in the treasury. .If Poland
were to beat its swords into plowshares it still would be unable
to pay its debts to the United States except by a dollar balance.

#14. BARRON'S. January 23, 1933. p.21. Sir Walter T. Layton.
London, England.
Contrast with this the position of the United States. Her
trade shows an excess of exports over imports', and there is no
hope of changing this situation so long as her tariff remains
practically prohibitive on many kinds of goods. It is almost
equally difficult for British and other European mercantile mnar-
ines to earn money in America by carrying American trade, for the
United States'has taken special steps to ensure that her goods
are carried only in American ships.
Unless American policy in these respects is reversed, the
debts can be paid only in gold or by European assets already in
America; either course will postpone the day when it will be pos-
sible to stabilize again the currency systems of the. world.

#15. THE PROTECTIONIST. January 1933. p.176. Prof. Alfred C.
Lane of Tufts College.
Paying us in goods which we can well supply ourselves is
like paying a wager in ice cream just after a Christmas dinner.

#16. CURRENT HISTORY, 'January 1933. p.417. Bernhard Ostrolenk.
It has been argued that it may not be necessary for Great
Britain to have a surplus in the.United States-that payments can
be made indirectly, for example, by Great Britain selling manu-
factured goods to Brazil, and that the surplus of exports from
Great Britain to Brazil be used to pay for the imports from Bra-
zil into the United States. While this method of paying debts
is entirely possible aid in fact is common, the debts would still
have to be paid by goods. What is proposed means that American


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exporters to Brazil would have to reduce their exports in face
of the onslaught of Britis-h exports there and -that instead of
giving a favorable balance of trade to Great Britain we would
: give it 'to Brazil.

#17. FOREIGN AFFAIRS, January 1932. p.217. Edward- M. House.
Uncertainty is one of the factors delaying the return.of
norma-l economic conditions. While the debt question hangs fire,
'for example, England cannot set a new par for sterling and re-
turn to the gold standard. This is of much importance to American
Trade, and so to the budget of the United States Government.

,#1i8. CURRENT HISTORY, January, 1933. p.419. Bernhard Ostrolenk.
It may be true that only 10% of our total production is ex-
ported, but let us remember that in 1929 we exported 17% of our
wheat, 30% of our tobacco, 50% of our cotton, 25% of our corn in
the form of pork and beef and 40% of our copper. In brief the
abolition of our export market would destroy from one-fourth to
one-half of our agricultural activity.

January, 1933. p.6.
The effects of rising rates for dollar exchange are seen in
all branches of our foreign trade. They explain why, in competi-
tion with wheat quotations in Canadian, ,ustralian or Argentine
currencies 'our total exports of wheat and the equivalent of wheat
in flour from July 1 to December 10 this season totaled only 23,
888,000 bushels, compared with 75,766,000 in the previous season,
whereas Canada's exports (four markets) increased from 117,533,000
to 175,156,000 bushels.

#20. BUSINESS WEEK, January 18, 1933. p.32. Editorial.
From the low-points of June 1932 or thereabouts, the prices
of commodities'had made encouraging gains by September. Cotton
had worked up from 5$ to 9$; wheat from 435 to 49$; corn from
.31 to 35$; hogs from $3.90 to $4.90.

#21. BUSINESS WEEK, January 18, 1933. p.32. Editorial.
Wisely not counting on winning a postponement of debt pay-
ments, the Bank of England began in September to buy dollars so
as to be ready for December 15. There was not much dollar ex-
change available--that is, American firms and individuals owed
British firms and individuals no great amounts-so the accumula-
tions of the British government pretty well cleaned up the market.
And as the supply of dollar exchange grew scarcer, the price of
dollars rose. The pound sank from $3.50 it $3.15; the dollar rose
from 5-s. to 6-s.

#22. BUSINESS WEEK,.January 18, 1933. p.32. Editorial.
The British and traders of all countries whose money fluctu-
ates with sterling faced the problem of paying 9% more in shillings
for wheat, cotton, pork, or corn. Of course, they couldn't. PAces
of the things they were selling were not rising. They couldn't
pay more shillings for goods and resell them at the same old price.
So they simply continued to bid the same number of shillings for

Aff irm.

Page 4.


a bushel of wheat. And such is the competition to get into the
export markets that they got wheat for what they bid.

#23. BUSINESS WEEK, January 18, 1933. p.32. Editorial.
Wheat sagged back to 41; cotton to 6 ; hogs to $3.60. The
gains of summer were gone. Furthermore, even at the lower prices,
the shrinkage in volume of exports was appalling. Agricultural
economists compute that the slump in price of these commodities
since September multiplied by the amounts that then remained to
be exported runs to $1 billion. This is what is cost the farmer
to collect $95 millions from Great Britain on December 15.

#24. NEW YORK TIMES, January 15, 1933. Section 4. p.l. Edwin L.
Now that this country is getting gradually face to face with
the fact that it is no longer a question of what concessions we
may be pleased to make from the totals due us, but rather a ques-
tion of what we can salvage, there arises the possibility that we
will try to get something more out of the situation than a set of
defaulted promises to pay. Some real advantages will appeal even-
tually to our leaders as worth more than the .hollow moral pleasure
of having stuck to our guns regardless of what Europe did.

#25. NEW YORK TIMES, January 15, 1933. Section 4.p.l.Edwin L.
On the one hand we have Britain studying the possibilities
of the stabilization of the pound sterling. We have the United
States deeply interested in the return of the British to the
gold standard. On the other hand, we have Britain saying, in
effect, that she cannot continue war-debt payments on the basis
of the debt settlement and blaming war-debt payments in part
for her gold difficulties; it was emphasized that the Dec.15
payment was met by shipping bullion from the already depleted re-
serve back of the pound sterling. In between these two positions
is the factor that Britain has a good deal to lose from an open
default in her war debt payments to this country; default is an
extremely precarious measure for a people with a foreign invest-
ment equal to some E5,000,000,000 gold. It is worth something to
Britain to avoid default; it is worth something to the United
States for Britain to return to the gold standard.


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