Debt Wrangle

Last week certain Senators felt obliged to find arguments against the proposed U. S.-Italian debt agreement (TIME, Nov. 23).

"America Can Collect." Since the U. S. Debt Commissioners avowedly struck hands with the Italians upon terms declared by the Administration's experts to represent Italy's utmost "capacity to pay," the Democrats were forced to attack the settlement by crying that it represents but a mere pittance of what the U. S. should receive.

Senator Reed of Missouri:

"I can say to the nations of the world that there are a good many ways in which America can collect her debts, and if we had some red blood flowing through the veins of a few American statesmen, we would not hear so much of that talk across the ocean.

"One way in which France can pay part of her debt is to cede to us her possessions in the West Indies, which are of no use to her, but which would be of inestimable value to us as outposts to protect our coast and to protect the Panama Canal. Every one of them, to borrow a phrase of Napoleon, is a cannon pointed at the heart of the United States.

"I imagine that trade and commerce with the United States are of some value to Italy, and I know that if she were threatened with deprivation of that commerce and of the right to borrow money of the United States, Italy would begin to understand that even an Italian Dictator cannot be also a dictator to America."

In the gallery, an attache of the Italian Embassy took down with racing pen these words and many another. Soon they were cabled to II Benito at Rome. Many impartial observers deplored the fact that presumably the internal U. S. political significance of such remarks was not understood when they reached Italy. What Italian realizes that Senators with many Klan constituents are apt to see in any settlement favorable to Italy a favor to the Pope? What Italian stops to remember that Senators with numerous German-American constituents are obliged to resent Mussolini's recent anti-German threats concerning the Tyrol? (TiME, Feb. 15, ITALY.)

The Italian attache's pen raced on. It wrote that Senator McKellar of Tennessee (Democrat) called Mussolini "a bandit." It wrote that Senator Reed stigmatized Fascismo as "the Italian Ku Klux Klan." It wrote that Senator Howell of Nebraska (Republican) considers this settlement (totaling $2,407,000,000) "in effect a cancellation of the Italian debt."

Rebuttal. The Republican Senators labored furiously, not so much to prevent defeat of the measure, since that is deemed highly improbable, but to head off the Democrats from getting through a vote referring it back to the reporting committee for expert investigation. This proposal was the more feared because numerous gentlemen in both camps favor a long delay, to carry them past the November elections without the necessity of voting on the settlement, which is loaded with dynamite in some constituencies.

Accordingly Senator Smoot declared again and again that the U. S. cannot get "one cent more" from Italy, and implied that no amount of expert investigation can remedy that fact. "I want to say," he cried earnestly at one point, "that if we do not get this agreement it will be a long, long time before we get anything out of Italy. . . . Personally, I do not want to see Italy exhausted. She must live as well as we."

Senator David A. Reed of Pennsylvania delivered perhaps the most rational and least bombastic speech made in behalf of the Administration. He said:

"When we discuss the debts owed us by foreign governments we ought to keep in mind, and they ought to keep in mind, that we are not talking about something that is the accumulated property of the American Treasury; that we are discussing a debt which ultimately they owe to the people from whom the U. S. Government borrowed; that, in a sense, we Senators are the indorsees for them, and that if they fail in their promise the burden will fall on the American people."

Adjournment upon this debate, for the week, was declared without its having reached a vote.