Debts Due

To the Editors:

The debt bomb [Jan. 10] proves once again that every loan, even between nations, is a gift until it is repaid.

Norris E. Chapman

Denver

The world has now discovered the dangers inherent in the Federal Reserve Board's pursuit of tight-money policies. It is tragic to see 12 million Americans unemployed, thousands of U.S. companies in bankruptcy and hordes of Third World countries on the brink of default. No wonder John Maynard Keynes warned us to avoid high interest rates.

Suzanne M. Taylor

Bothell, Wash.

So the Federal Reserve is the "lender of last resort" and will "create the liquidity to save the system." What that means is that Americans, through taxation and inflation, will have to pay to save a group of greedy bankers and irresponsible governments, including our own.

Jack Van Zandt

Tehachapi, Calif.

As a former deputy comptroller of the currency for special surveillance, I know that all national banks, large and small, were regularly informed of their excessive and risky loans to foreign countries. These loans were not made solely on the recommendation of young lending officers; they were approved by the banks' directors. The comptroller's attempts to reduce or eliminate these loans were thwarted by a Federal Reserve Board that contended that loans to foreign countries should not be criticized, and by bank executives who argued that such countries could not go bankrupt or fail to exist. In view of the current situation, the Fed and the bankers should remember that they were told that even in lower Manhattan the chickens would come home to roost.

Robert A. Mullin Rockport, Texas

Your story is a fine analysis of the lending practices of Western bankers. I agree with your statement that the responsibility for this mess lies with the "gunslinging" young bank officers who get ahead by handing out money to foreign borrowers with little concern about repayment. The banks are at fault for this situation. They fail to train their personnel properly.

Joseph W. Welsh

Vero Beach, Fla.

Some readers may have been surprised at the magnitude of the figures used for the countries in your debt watch list chart. Consequently, some explanation of the numbers might be useful. The dollars of total debt at the end of 1982 are gross external debt, including short-term debt but excluding assets abroad. Sometimes short-term debt is not taken into account by analysts, but recent experience has shown that such credit is at least as troublesome in refinancing situations as longer-term credit. Similarly, foreign assets may not always be immediately available.

In measuring the debt service payments for 1983, we go beyond the conventional method, which includes interest payments and amortization of principal for medium-and long-term debts. Morgan Guaranty also counts short-term debt, because a country that faces a liquidity problem should not assume that short-term credits will routinely be renewed.

Our rigorous definitions result in considerably higher figures than are customarily applied. But we believe our approach is valid in the current situation. In reality, however, we would not reduce a country's credit standing solely to a set of numbers, without considering other factors as well.

Rimmer de Vries

Senior Vice President

Morgan Guaranty Trust Co.

New York City

I was so alarmed by the operations of the banking business that I have decided to keep my extra cash in a purse hung around my dog's neck.

Paul Pugliese

Long Branch, N.J.

Crumbling America

If we are going to salvage what is left of America's roads, bridges, dams and sewers [Jan. 10], let us kill two birds with one stone. We should put every able-bodied person receiving welfare or unemployment benefits to work on this project. We would be restoring a sense of pride to the jobless who want to work and getting our money's worth from those who want only a handout.

Gregg D. Merksamer

Scarsdale, N. Y.

The 78-year-old Arch Bridge linking Bellows Falls, Vt., and North Walpole, N.H., was declared unsafe eleven years ago. It was supposed to be dropped into the Connecticut River last December. After five explosive blasts, the span still stood, much to the chagrin of the demolition crew. It was made of a superior-strength steel. I hope that the experts will check to see if the other condemned bridges are made of quality steel and can be repaired rather than replaced.

Mrs. Peter D. Koson

Alstead, N.H.

Christian Schools

The scholastic success of Christian schools [Jan. 10], while admirable, is due more to their strict discipline than to their religious orientation. Rather than allow children to be brainwashed by the creationist teachings of fundamentalists, we should attack permissiveness in our public schools and restore that system to what it should be: secular but quality education.

Robert D. Lindskog

Bloomington, Minn.

Scores are higher in the Christian schools for a few reasons. Parents take an interest in their child's performance, the school may expel a student for the slightest offense, corporal punishment is permitted, and the dregs of society are not admitted. Public schools must offer an education to everyone who walks through the door. A diverse student body will never score as high as a small homogeneous group.

Max Hunsicker

Mount Gretna, Pa.

Proponents of fundamentalist schools have forgotten one of the basic teachings of the Bible, which is that the Christian is to respect and obey the government. In taking an arrogant, self-righteous position, the supporters of Christian schools not only reproach the Bible, but insult those who work in the public schools. The public system does work, but it works better when we stay to build rather than when we desert to experiment.

William Mitchell Murphy, Principal

Eugene Field Elementary School

Poplar Bluff, Mo.

Rock-'n'-Roll Deb

"Haute decadence" is my opinion of Cornelia Guest and her debut as a rock performer [Jan. 10]. It is tragic that again it is "fashionable to flaunt the traditional, frivolous perquisites of wealth and class."

William David Taylor

Bannockburn, Ill.

Cornelia Guest provides excellent reasons for increasing inheritance taxes on the revoltingly rich.

E. Stacy Creamer

Blue Bell, Pa.

Hooray for fun-loving, High School Dropout Cornelia Guest! However, it should be noted that many debutantes have gone on to become lawyers, journalists, educators, businesswomen and civic leaders. Let's not be too eager to sell the American debt short.

Barbara P. Grant

Chicago

Cornelia says she can add and subtract and read. So can a second-grader.

Rick White

Los Angeles

And I thought Marie Antoinette was insensitive!

Robert Seward

Endicott, N. Y.

Rubinstein Calling

One day the voice on the other end of the line said, "This is Arthur Rubinstein" [Jan. 3]. My husband, who was superintendent of the school district, was sure someone was pulling his leg. But no, the maestro was in the area and wondered if there was a school interested in a spur-of-the-moment program. Rubinstein's greatness was in his wanting to share his God-given talent with others.

June M. Larson

Harrison, Mich.

Meat Eaters

In the article "Prague's Sullen Winter" [Jan. 10] you say "a middle-level executive is responsible for overseeing the production of 2 million tons of canned meat a day." Two million tons is 4 billion lbs. With a global population of 4.585 billion this is almost 1 lb. of meat a day for every person in the world. No wonder the plant cannot meet its quota.

Emerson H. Virden Jr.

Norristown, Pa.

Out of Mothballs

The Navy assures us that the recommissioned battleship, the U.S.S. New Jersey [Jan. 10] would take ten hits by conventional Soviet cruise missiles before being put out of action. This is not very comforting when one contemplates that several battleships were sent to the bottom in World War II by aircraft and submarines that seem primitive today. For $326 million we are getting a floating flagpole to carry Old Glory to the world's ports.

John E. Borrego

Charlotte, N.C.

The U.S.S. New Jersey a sitting duck? Nonsense. As the last commanding officer of this great ship, I can tell you that a screaming eagle is far more appropriate.

Robert C. Peniston

Captain, U.S.N. (ret.)

Lexington, Va. This file is automatically generated by a robot program, so viewer discretion is required.