SUPPLEMENTARY REBUTTAL NOTES
RESOLVED: THAT THE UNITED STATES SHOULD AGREE TO THE CANCELLA-
TION OF INTER-ALLIED WAR DEBTS.
#1. Dr. Jacob H. Hollander.'Address at Washington,D.C.January
The social menace of cancellationist advocacy is developing
with disturbing swiftness before our eyes. The unmistakable
appearance, indeed, the creeping spread of repudiation sentiment
in the United States and in South and Central America--as to pub-
lic indebtedness, corporate obligations, mortgage liens, business
liabilities--is a countenance given to war debt cancellation, If
we are able to lighten the burdens of foreigners who are able to
pay, we should we not preferentially lighten the burdens of our
own citizens who are not able to pay--runs the challenge.
#2. EVENING EXPRESS, Portland, Maine. January 4, 1933.p.5.Frederick
Probably no country in the world is in better shape to pay
a foreign debt at this time than France and yet she has seen fit
to default. With so shining an example set, it is regarded as
not out of the question that the nations which owe her will imi-
tate her policy and decline to pay what they owe her.
About $2,000,000,000 is owed to France by various nations,
chiefly the succession states and nations which France has sought
to bind to -her in terms of alliance in order to serve her military
ends. Not one of these nations is in so favorable a position to
pay as France herself.
#3. EVENING EXPRESS, Portland, Maine. January 4, 1933.p.5.Fred-
It now is held possible, because of these developments that
these nations which owe France will summon the courage to follow
her example and default on their debts to her just as she has de-
faulted on her debt to the United States.
A few years ago these nations would not have dared take such
a step lest France immediately invade them. But now they are armed
themselves and have the .example of France herself as a defaulting
debtor.leading the way. The' entire situation seems to- contain
germs of a general European repudiation of inter-governmental in-
debtedness. France may find that she has fired a train which may
result in a financial explosion far more serious for her than the
meeting of the instalment due the United States would have been.
#4. EVENING EXPRESS, Portland, Maine. January 4, 1933. Frederick
Yugoslavia, the new state constituted on the ruins of old
Serbia, Rumania, and Poland are the largest debtors to France.
Each owes about 100,000,000 and Greece a similar amount. France
was willing to carry her iron ring all the way to the Baltic and
did make small loans to Latvia, Lithuania, and Estonia but their
indebtedness is slight compared with the amount owed by the other
#5. CHRISTIAN SCIENCE MONITOR. December 28, 1932.
The richest irony in the Russian situation springs from the
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emotionally righteous indignation with-which default was greeted
by France. Naturally, as the largest .creditors of Russia, French
investors felt the pinch severely. But, not content with castigat-
ing the Bolshevist leaders, the French Government roundly charact-
erized the effects of any default upon any country.
M. Louis Lucien Klotz, French Finance Minister in 1918, in-
troduced and had passed the following resolution in the Inter-
Allied council, thus describing the consequences of default:
Such a policy would mean the destruction of the credit of
states as much from a political as.from a. financial stand-
There would be no more security in the relations of states,
and it would be impossible to enter into a contract over any
long period of time on account of the risk of such a contract
being eventually ignored.
#6. CHRISTIAN SCIENCE MONITER. January 17, 1933. p.9. Sisley
Huddeston, Special -uropean Correspondent.
It must be clearly understood that despite the difference
of viewpoints on the debts, French feelings toward the United
States have never ceased to be cordial. There is still a live-
ly sense of gratitude for American aid during the World War.
There has always been a warm welcome for American visitors. Never
should it be supposed that France has been lacking in apprecjtion
for the immense contribution that America has made toward world
#7. THE COMTIERCIAL AND FINANCIAL CHRONICLE. January 21, 1933.p.
That the Bank of England has repurchased a substantial part
of the gold which it turned over to the Federal Reserve Bank
of New York on December 15 to consummate the British war debt
payment to the United States was indicated in the daily gold
statement issued on January 19 by the Reserve Bank.
#8. NEW YORK TIMES, January 26, 1933. p.1. By Ferdinand Kuhn, Jr.
LONDON, Jan.25.--The British hope their note, delivered to
Washington today, will end all talk of bargaining in connection
with the impending war-debt discussions.
Beneath its friendly phraseology the note is felt here to be
a plain intimation that war debts are not as asset with which to
bargain, but an international nuisance for all concerned. While
the note contains a warm-hearted acceptance of the United States'
invitation to a conference in March, it is also interpreted here 0
as serving notice that Britain will not bind herself to stabilize
her currency or modify the Ottawa Imperial Conference.tariff
agreements as a return for debt reduction.
#9. NEW YORK TIMES, January 26, 1933. p.1. Washington,Jan.25.-
The text of the note on war debts delivered to Secretary Stimson
today by Sir Honald Lindsay, the British Ambassador.
The effect of the debt situation upon a wide range of world
economic problems is crucial to every government, and in the
course of the discussion at Washington on the debt we shall be
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glad to take the opportunity of exchanging views with Mr. Roose-
velt on those other matters in which the two governments afe
so closely interested.
It will be recognized that decisions on matters which consti-
tute the subject of the approaching world economic conference and
which affect other States cannot be reached before discussions
take place at that conference between all the States represented
#10. THE COMMERCIAL AND FINANCIAL CHRONICLE. January 21, 1933.
"Through the Ottawa agreements, actual discrimination is made
against-wheat grown in this country. Canadian wheat is now given
a preference of 61 a bushel over sheat coming from the United
States--that.is, Canadian wheat is allowed to enter the British
market free of duty, while American wheat is obliged to pay a
duty of 6 a bushel. This is a virtual denial of the British
market.to wheat grown in.this country. And, as a consequence, is
our Congress to be called upon to make' up.the difference by vot-
ing a bonus to the American farmer year after year? Just ht the
moment the Canadian wheat producer has another advantage in the
fact that the Canadian dollar is greatly depreciated, ruling at
a discount running all the way from 10% to 15%.---But the London
"Times" tells us that Great Britain is not prepared to consider
a return to the gold basis as an offset to debt concessions iade
by the United States. If, on 'top of this, the discrimination of
6 a bushel against American grown wheat is to continue as a
fixture then we have a one-sided arrangement where the United
States stands to lose everything and to gain nothing.----Are the
people of the United States a simple-minded folk?
#11. THE COMMERCIAL AND FINANCIAL CHRONICLE. January 21, 1933.
p.405. London Dispatch.
Officials here are sometimes askod what their government
will offer the United States in return for debt reduction. Their
answer is always "Nothing." and they add that there is no need
to bargain, since economic events will make a clean sweep one way
#12. THE COMMERCIAL AND FINANCIAL CHRONICLE. January 21, 1933.
p.405. London Dispatch.
To-day no politician and almost to economist in England has
a good word to say for the gold standard, which is thoroughly
feared and dist'rust'ed by the 'mass of the people. The British
people have learned to talk of the "fluctuations of gold" whenever
their own currency has been erratic. They have been taught to
pity the gold countries for their useless stocks of bullion and
to congratulate themselves on sterling's stability power. The
gold standard, in short, has been made the symbol -of the bad days
before 1929, when Britain's prosperity languished by comparison
Ultimately, Britain will go back to gold, or some other in-
ternational standard, but the propaganda of the last 18 months has
made the' jump more difficult, and has made any immediate debts
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and currency bargain a mere dream.
#13. NEW YORK TIMES, January 29, 1933. Section 4, p.1.Edwin L.
Indications continue to multiply that the United States will
be offered something in the way of a "lump sum" payment. There is
talk in Europe of a sum ranging from $1,000,000,000 to $2,000,000,
000. Under the Lausanne arrangement Germany stands committed to
pay $700,000,000 to settle her reparations account. France owes
for war stocks $400,000,000. Italy has recently sent out a sugges-
tion that she pay $100,000,000 as a final settlement.. It is evi-
dent that mathematically there can be built up a scheme for the
payment of a definite sum. It is most frequently mentioned that
the 3,000,000,000 marks Germany stands to pay could be put in the
form of gold bonds of the German railways, guaranteed first by the
German Government and then by the debtors of the United States in
a fixed proportion. Then, the remainder could be covered by bonds
to be sold on the world market, including the United States, in a
manner to insure to the United States Government the payment of
between one and two billion dollars in from two to five years.
#14. SUNDAY TELEGRAM, Portland, Maine January 8, 1933. Frank'
Paris, London, Rome and Brussels--that is, the capitals of
the chief debtor nations--have already a fairly definite idea f
of what sort of proposals they intend to make -after arch 4th.
And, although undoubtedly the several nations will make their
proposals separately, they will be based on certain common prin-
ciples and follow similar lines. Moreover, the key of all these
proposals can be found in the Lausanne Agreement of last Summer,
which was deliberately designed to be the corner stone of the
whole system of debt and reparations elimination.
S#15. SUNDAY TELEGRAM, Portland, Maine. January 8, 1933. Frank H
Reparations were reduced by the 'ausanne Agreement to approx-
imately 10% of their value under the Young Plan. And a similar
reduction of war debts will be asked by the Allied debtors next
March. In place of a present capital value of $4,600;000,000 the
British will ask that their debt be reduced to A460,000,000 and
similar cuts will bring the French and Italian to $400,000,000 and
$200,000,000 respectively* In round figures we are to be offered
$1,000,000,000 to liquidate a debt which still stands upon the-
books for about $11,000,000,000 so far as the four considerable
countries are concerned.
#16. THE PROTECTIONIST. January 1933. p.176. Prof. Alfred C.
Lane of Tufts College.
Imagine that some of our wet friends, and probably many
of our drys, would be willing to be paid in barrels of good Ger-
man beer and bottles of French brandy or wine; it might be better
if we are to have more alcoholic beverages, that.we should take
them from Europe rather than build up a big liquor industry in
this country, which would always be an object of political attack
and therefore always in politics,
Negative SUPPLEMENTARY REBUTTAL NOTES Page 5.
#17v THE PROTECTIONIST. January 1933. p.176. Prof. Alfred C.Lane
of Tufts College.
France might well give us the uninhabited Clipperton Island,
and Capt, Knox has suggested certain other islands in the Pacific
which she might spare. Great Britain might give us her claims
on the Antarctic Continent. While it would seem like an out--
rageous price to pay for a continent largely of ice, the develop-
ment of the Antartic Continent would give an outlet for our super-
fluous energies. It will be remembered that the purchase of-Alas-
ka was, at the time, attacked because of the outrageous price paid.
#18. CHRISTIAN SCIENCE MONITOR, January 12, 1933. p.12. W.Y.
Elliott, Professor of Government, Harvard Universityr.
Certain minor territorial transfers of coaling stations and4
air bases might be made. Of course, in any consideration-of the
United States taking over some of the West Indies in satisfaction
of the war debts, plebiscites of the inhabitants should settle
their.willingness in advance. But eventif not a foot of terri-
tory changed hands, an "open door" for American trade might
reasonably be asked, with absolute freedom from export controls"''
or discrimination against the investment of-outside capital. This.
would arrest the dangerous trend toward closing up access to the
raw materials of the world which is growing every day.
#19. CHRTSTIAN SCIENCE MONITOR. January 12, 1933. p.12. W.Y.
Elliott, Professor of Government, Harvard University.
England might be given either a lower interest rate, compar-
able to the French; or she might have the reconstruction debts,
which were repudiated to her bondholders by the' southern states,
credited against her principal account. Federal assumption of
these debts has a precedent in the 1802 assumptions for Georgia.
And the political danger of offending the defaulting states might
be avoided byttreating federal assumption as an acknowledgement
of the moral liability for the carpetbagger frauds for'which the
South has always properly disclaimed liability.
#20. CHRISTIAN SCIENCE MONITOR. January 12, 1933. p.12. W. Y.
Elliott, professor of Government, Harvard University.
If payments in kind were accepted, a large part of the trans-
fer problem would disappear. Radium from the Congo, and many
commodities not produced in the United States, could be accepted.
Coupled with tariff concessions on the mutual bargaining basis
advocated by President-Elect Roosevelt, this ought to make the
payment of the reduced debts economically feasible.
#21. THE PROTECTIONIST. January, 1933. p.176. Prof. Alfred C.
Lane of Tufts College. Hoa should the European war debts be paid?
Payment in definite quantities of raw material--for example,
so many tons of potash from Germany, so many tons of tin from the
British Empire, etc.
#22. THE PROTECTIONIST. January, 1933. p.176, Prof. Alfred C,
Lane of Tufts College. How should the European war debts be paid?
Payment in educational benefits. Many of our students would
like to go to Germany for post-graduate work. It would be possible
for Germany to pay something in the way of scholarships for Amer-
#23. BARCLAYS BANK MONTHLY REVIEW (London) January 193.. p.44,
If, as a result of the up-examination of the question, the
United States is able to.agree to a revision of the existing agree-
ments, any concessions granted to her debtors will mean a corre-
sponding addition to her own liabilities.
#24.. NEW ENGLAND HOMESTEAD. January 7, 1933. p.5. Editorial.
Those foreign debts are just as direct and legal as Amer-
Sican farm mortgages. 'There are $9,000,000,000 of American farm
mortgages, not so very much less than the foreign debts total.
Moreover, the present depreciated value of the farmer's dollar
means that the $9,000,000,000 in mortgages jumps practically to
the equivalent of 018,000,000,000 under pre-slump conditions.
We have a debt problem at home without going so far afield.
Too, if American farmers could have their debts scaled down they
would not spend the savings in a warfare' budget as is being done
i25. NEW ENGLAND HOMESTEAD. January 7, 1933. p.5. Editorial.
S The pet argument of financiers that if we write off foreign
debts those nations will. have money to buy our surpluses is good
as far as it goes,
Forgive American farmers their mortgage debt and they, too,
would buy a lot more, Eubstantially all of it. Not a mere frac-
tion, would be spent in the k.S.A.
Published December 1, January 1, and February 1. Price
$1.25 complete. THE DEBATERS INFORMATION BUREAU, 3 HORTON
PLACE, PORTLAND, MAINE.
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