Awakening

The calm, bearded gentleman who sat in the State Department, as well as his successor, the lean worried-looking little man; the cadaverous, fatigued-looking man who sits in the Treasury Department; the plump little man who guides the Department of Commerce--they have from time to time reached out with a long stick and gently prodded Europe. The prodding was, on the whole, very gentle, for they were gentlemen and the nations they were prodding had been our late allies. They did not wish us to appear dunners.

But, after all, there were debts of more than 12 billion dollars to be collected. Most of the prodded nations turned over uneasily and pretended to be asleep. Great Britain, whose debt made up more than a third of the whole, was the first to awake. She gave bonds covering her debt, arranged its payment over a period of 60 years and began to pay. Four smaller debtors followed suit: Poland, Finland, Lithuania, Hungary. The others were slower.

Recently (TIME, May 25), the three gentlemen prodded again, gently. "Reminders" were sent to the debtors who had made no arrangements to pay up. Chief of these was France, with a debt of $4,210,000,000, next in size to Great Britain's. Second was Italy, with a debt of $2,138,000,000. Third was Belgium, with $480,000,000. It had been intimated that the latter two would prefer to have France settle first. The three gentlemen frowned.

Last week, these three debtors began to show signs of awakening, began to make motions indicating that they were about to get out of bed and reach for their pocketbooks--or at least write out promises to pay on given dates.

France. Foreign Minister Briand, appointed to consider the debt question with Finance Minister Caillaux, in the French Senate rose and declared: "I cannot think that so great, generous-hearted and loyal a country ever would do us the affront to believe we seek to escape payment of our debts. . . ." In response to the question, he declared that "serious conversations" had been begun with the U. S. to that end.

Belgium. Baron de Carticr dc Marchiennc, Belgian Ambassador to the U. S. and Cuba, called on Mr. Mellon. He announced that he was going home and, when he returned, would bring a commission headed by former Premier Theunis to negotiate a debt settlement. Mr. Mellon smiled.

Italy. Baron de Martino, Italian Ambassador to the U. S., also called on Mr. Mellon. He inquired about how easy the terms would be for Italy if she made a settlement, whether a moratorium would be considered. Mr. Mellon replied that the terms would be as easy as conditions warranted. Then Baron de Martino cabled Mussolini for instructions--and Mr. Mellon smiled again.

The Problem. In dealing with these next three debtors, the question will arise whether the terms granted them will be more lenient than those granted Great Britain and the other nations* who have already paid up. It seems that France, Italy, Belgium cannot, will not, agree to any form of settlement that is not much more lenient. If a more lenient agreement is made, how will Great Britain take it? How will Congress take it? Congress has long protested that it would not forgive a cent of foreign indebtedness; but partial debt forgiveness disguised as lower interest or a moratorium Congress may well accept in compromise.

In regard to unofficial Americans hindering debt negotiations abroad by saying that U. S. proddings were not to be taken seriously, Representative Hamilton Fish Jr. suggested that the Logan Act be applied to silence the speakers. The Logan Act penalizes persons for making plans with Foreign Governments "to defeat the measures of the Government of the U. S."--in dollars up to $5,000 and in years up to three in prison.

Meanwhile, Otto H. Kahn, supposed to have been one of the "interferers" (TIME, June 1), denied through his Manhattan firm (Kuhn, Loeb & Co.) that the remark* attributed to him had been correctly quoted, said that they had been made at a private luncheon and did not refer to debt negotiations.

George W. Wickersham, also supposed to have offended, declared :

"I addressed a small group at the American Club in Paris and spoke of America's debt to France. I said we were indebted to her for her Art. The next thing I knew, I had been accused of making remarks uncomplimentary to the United States.

"It is silly, because no patriotic citizen would do anything to interfere with negotiations between his country and another."

* Other nations: Poland, Finland, Lithuania, Hungary.

* "If at times you hear words that offend you, always put it down as the fact that they do not come from the soul of the American people, but from the politicians, who do not represent the Nation."