Borah Remarks

One January afternoon, William E. Borah, Chairman of the Foreign Relations Committee, rose in the U. S. Senate and began an address with these words:

"The press dispatches from Paris carry this morning the account of a speech made in the Chamber of Deputies by Louis Mar in (see Page--) on the subject of the French debt. It seems to express the view not only of the distinguished speaker but the view of the Chamber of Deputies and I presume in a large measure the view of the French people. . . .

"We are regarded as to some extent playing the role of a Shylock, exacting the last cent or the last pound of flesh; and it is particularly to that phase of the controversy that I wish to address my remarks today.

"The United States is not in the attitude of an exacting creditor, and has displayed none of the qualities of an exacting creditor."

With these prolegomena, he launched into the discussion of the terms we have offered to debtor nations. He told how we had lent money to the Allies during and following the War at 5% interest, then considered a fair rate. He told how the British debt at the time of settlement amounted, with interest, to $4,600,000,000. In settling this account, we agreed to accept interest at the rate of 3% and 3 1/2% during 62 years while the principal was being paid up. Meanwhile, the U. S. which borrowed the money to lend to Britain, is paying a greater amount of interest on its own obligations. The following table shows the comparative amounts of interest on the 62 year payment plan

1) which the British will actually pay,

2) which the U. S. Government is paying on the same debt, 3) which the British would have paid at the original 5 % rate of interest: Interest

British pay $6,505,965,000

U. S. pays (assumed as 4 1/4%) 8,172,665,000 British would have paid (at 5%) 10,306,900,000

In brief, we reduced the total interest almost four billion dollars, and the U. S. Government actually will receive about one and a half million dollars less than it pays in interest on the same debt.* The same liberal terms are open to the French.

Mr. Borah continued:

"If this stood alone as the only item in the results growing out of the War it would not be, perhaps, so striking; but it is constantly argued that, in settling the debts we must take into consideration, as M. Marin says, all the facts and circumstances, all the conditions and sacrifices of the War, and, I presume, all the gains and advantages of the War." He summed up the material gains of the War:

P: U. S. No territory; no natural resources; no rights of exploitation; no indemnity.

P: Great Britain. Exclusive of Persia, 1,607,053 square miles of territory with 35,000,000 inhabitants-more territory than there is in Washington, Oregon, California, Idaho, Nevada, Arizona, Utah, Montana, Wyoming, Colorado, New Mexico, Texas, Oklahoma and Kansas; valuable natural resources; destruction of her only great rival, both naval and commercial, on the sea.

P: France. Territory 402,392 square miles in extent and inhabited by 4,000,000 people; petrolium reserves; the coal beds of the Saar Valley, worth from $150,000,000 to $500,000,000; recovery of Alsace-Lorraine; a large share of $6,500,000,000 paid already in reparations by Germany.

"There have been some strange arguments advanced from time to time in regard to this French debt," Mr. Borah pursued. "We are not only advised by the French people, but we are advised by a certain class of our own people to a limited extent, that we ought to forgive the French debt because the French practically forgave the debt which we incurred during the American Revolution. As a matter of fact, the United States paid every dollar of the debt incurred at that time. I have the statement of the facts and figures furnished me by the Treasury Department, where the records are, disclosing a full settle- ment and a higher rate of interest than we are now proposing."

Here Senator Bruce of Maryland interrupted to defend the services of the French to' us in our Revolution, concluding :

"Does the Senator believe that Lafayette, the able young man who left the side of his bride, was actuated by anything in the world but a surge of knightly chivalry for our people to come to this country?"

To this Mr. Borah replied:

"All honor to Lafayette. But Lafayette had to steal away. The French Government tried to arrest him while he was going. He had undertaken to to fit out a ship. He was deprived of the opportunity of taking it and stole away like a criminal from the French Government which was so deeply in sympathy with America.

"Not only that, but the time came when the Congress of the United States compensated Lafayette; and I have upon my desk now the statue which we enacted paying him for his services and deeding to him a large tract of land. The United States met every obligation and she did not plead at that time, as it is pleaded now, that the war was fought upon her territory and therefore we should not pay the debt. She did not plead that France came into the war late, after the battle of Saratoga, and, therefore, we should not pay the debt. She did not plead that it was a common fight for liberty and therefore she should not pay the debt.

"The French War debt now in principal and interest amounts to above 4,000,000,000. No part of the principal has been paid, and no interest has been paid at any time."

*As a matter of fact, the U. S. has been refunding its original 4 1/4% debt at lower interest and has prospects of avoiding most, if not all, of this loss.