Shylock! Shylock!

Indignation if not consuming wrath was in the voice of the Belgian press as M. Theunis, Ambassador Baron Cartier de Marchienne, Felician Cattier and Emile Francqui departed for the U.S. three weeks ago. "Shylock," "the soul of Shylock" people muttered in the streets of Brussels, and; press set down the opprobrious words in black and white. The contemptuous words were not spoken of any of the departing gentlemen, all honored as able statesmen or financiers in their country sneering epithet was applied to an intangible person, that daddy-long-legs of symbolical figures, Uncle Sam.

Last week the four distinguished Belgians announced that they were ready to sail for home Said Le Soir: "Those who attributed the soul of Shylock to our American friends were bad prophets."

The change of sentiment in Brussels was a reflection of the settlement of the Belgian debt to the United States. For last week the four representatives of Belgium had sat down with Secretaries Mellon, Kellogg, Hoover, Senator Smoot and Representative Burton and come to a funding agreement.

The Wilson Promise. At the time of the negotiation of the Versailles Treaty the question of the Belgian War debt came up. Belgium's creditors at Versailles agreed that Germany should be made to pay what Belgium had been obliged to borrow for the War. President Wilson gave his assent to this agreement and is even said to have put his "promise" in writing. The Senate of course rejected the Versailles Treaty, and Congress passed a law specifically forbidding the arrangement. When the Dawes Plan was adopted, 5 per cent of the German reparations payments should be applied to paying Belgium's War debt to several countries including the U. S. The Belgians came to the debt conference feeling that the U. S. should live up to Mr. Wilson's agreement, and accept a claim on Germany, or the Dawes payments instead of making Belgium pay her war borrowings of $171,780,000.

The Belgian Debt. During the War Belgium borrowed $171,780,000 from the United States. After the armistice she borrowed $246,000,000 more for reconstruction purposes. The interest rate

Pre-Armistice Debt Settlement.

The U. S. Debt Commissioners refused to allow a transfer of Belgian War borrowings to Germany. They declared that President Wilson's "promise" was not legally bound but that "nevertheless. . . . .there does continue a weighty moral obligation as a result of assurances given which differentiate this sum from all other debts due the U. S. from foreign countries." So it was agreed in compromise that Belgium should be bound to pay the principal of the $171,780,000 War borrowings over a period of 62 years, beginning with $1,000,000 in 1926, and scaling up to $2,900,000 beginning in 1932 and continuing until 1987.

Post Armistice Debt Settlement.

The post-war debt was funded on terms almost identical with those granted to Great Britain, Finland, Hungary, Lithuania and Poland: to the original principal was added 4% per cent interest to December 1922, and 3 per cent interest from that date to June 1925. During the next ten years interest charges were arbitrarily scaled down to fixed sums, and after that they will be 3 1/2 per cent of the principal for 52 years more. The result is that Belgium will have 62 years to pay the post-war debt, beginning at $2,840,000 and scaled up to $9,800,000 at the end of ten years after which they continue uniform.

Total Settlement. As a result Belgium will have to pay a total of $3,840,000 scaling up to a uniform $12,700,000 from the 10th to 62nd years* on which these loans were granted was 5 per cent. With the accrued interest the Belgian post-war debt amounted nominally to about $556,000,000.

The Strategy. The United States negotiators were able to give terms lenient enough to meet Belgium's ability to pay and yet placed themselves in a position: 1) where they did not give up the principle that the United States holds its debtors individually and not Germany responsible for their debts, and 2) of maintaining the main principle of debt funding on which the British settlement was first made (3% per cent interest and payment over 62 years). As a result they will go into the French and Italian debt funding on which the British their debt policy unimpaired.

Ratification. The debt agreement must be ratified both by the Belgian Parliament and the United States Congress. Congress does not assemble until the first week in Deember and Belgium is expected to make her first payment under the agreement, on Dec. 15. So Congress will have to work fast if it is to ratify the agreement before the time for first payment falls due. Little opposition, except possibly in the Senate (Borah), is expected at the present time.

Reaction. M. Janssen, Belgian Finance Minister:

"Above all, we are glad that we are finished with the great unknown in our finances. Now we know exactly where we stand and the sword of Damocles no longer hangs over our head. We can lay out a financial program we can execute."

Both French and Italians, according to despatches from abroad, were disposed to look for more lenient terms in view of the Belgian settlement, although Washington made it clear that the Belgian settlement was a special case of leniency. A definite date, Sept. 15, has been set for the sailing of the French debt mission to the U. S.

-The amounts to be paid over 62 years by the several countries which have funded their debt are:

Principal Interest

Great Britain $4,600,000,000 $6,505,965,000

Belgium 417,780,000 310,050,500

Poland 178,560,000 257,127,550

Finland 9,000,000 12,695,055

Lithuania 6,030,000 8,501,940

Hungary 1,939,000 2,754,240