Italy's Debt

COMMONWEALTH (British Commonwealth of Nations)

A serious debtor and a smiling creditor--Count Giusseppi Volpi, Finance Minister of Italy and the Rt. Hon. Winston Leonard Spencer Churchill. Chancellor of the British Exchequer. A sleek, bearded Latin and an expansive, rubicund Briton. The most powerful self-made Italian industrialist, and the most genial onetime First Sea Lord of the British Admiralty. Such were the two completely antithetical statesmen who sat down to dicker over a settlement of the Anglo-Italian debt, in London, last week. What they said to each other naturally remained a diplomatic secret. But the two sets of public opinion between which they were expected to compromise have been made clear by the Italian and British press for some months past. Mr. Churchill was acutely conscious that the British taxpayer believes himself to have concluded a far too lenient tentative Anglo-French debt settlement with the wily M. Caillaux (TIME, Sept. 7, COMMONWEALTH). Ergo, Mr. Churchill was expected to obtain proportionately more from Italy than he had been able to extract* from France. Britons roughly figure the full amount of Italy's debt to them at 580 million pounds ($2,818,800,000) ; and considering that Britain is paying a total of $92,310,000 a year to the U. S., with nothing definitely in sight from France, Mr. Churchill undoubtedly felt impelled to mete out the heaviest practicable terms to Italy. Count Volpi, on the other hand, could point to the fact that the U. S. Debt Commissioners have granted proportionately much easier terms to Italy (TIME, Nov. 23) than those which they have thus far demanded from France. Count Volpi was therefore expected by the Italian taxpayer to get Mr. Churchill to see that, instead of demanding proportionately more from Italy than from France, Britain should be content with less. The Initial Offers. The British were said to have knocked off 80 million of the 580 million pounds owing to them for a starter, and to have proposed that the residual 500 million pounds ($2,430,000,000) should be repaid to them in equal yearly installments over 62 years, i. e., a flat annuity of slightly over 8 million pounds ($38,880,000). The Italians allegedly replied by offering to repay a total of ap- proximately 250 million pounds (half the British demand), in yearly annuities of 4 million pounds ($19,440,000).

* As everyone knows, the Anglo-French agreement was contingent in any case upon the still unconcluded Franco-U. S. debt settlement. If France should agree to pay the U. S. proportionably more, Britain was to have pari pasau treatment. However the French fiscal breakdown has damped British hopes of ever receiving even the minimum agreed upon by Caillaux.