TIME TO RETIRE
The time is approaching when the problem of war debts must be given a decent burial. If the administration opens hasty, ill-considered negotiations now, it will be rewarded with a bumper crop of defaults. If it shows a meek willingness to take what is offered, the nominal sum which crosses the Atlantic will have more of a nuisance value than a commercial one, and will tangibly lower the nation's diplomatic batting average. The failure of ninety-five per cent of the debt-payments due last year resulted not merely from the poverty of the defaulting and token-paying countries, but also from the lack of any pre-arranged agreement acceptable to both sides.
Last December England paid its installment in full, hoping that this lone honor would give power to its pleas for cancelling the account. This winter will find the situation altered, with an English government unwilling to assume the political dishonor of being the only one not to default. The United States, having taken neither official satisfaction from the full payment of December, nor official umbrage at the token of June, has left it in the able hands of Mr. Oltamberlain to shift from business ethics to hard reality. America must make the same change in its own attitude.
Although England and France have long had the courage to realize that German reparations are dead, they are now offering to hand over the new Lausanne indemnity of $720,000,000, swelled from their own exchequers and those of Italy and Belgium to about a billion dollars. Before Herr Hitler's government has forgotten this old-fashioned agreement, it would be well for Washington to accept this ten per cent payment from Europe to liquidate the debt. The thorny responsibility of collecting from Germany would not be America's, however fruitless the attempt.
The economic framework of the New Deal automatically bars payment in goods or services. Gold payments are hardly desirable and very improbable. The Nazi "weltpolitik" and the Blue Eagle U. S. Navy construction, give the lie to linking debts with disarmament. It is the task of President Roosevelt to tell the country the true state of the war-debts rather than to permit the next due-date to arrive bringing no satisfaction but plenty of recriminations. The war-debt problem has become one of sanitation, not salvage.