Olonjrjssinnal ltaml 
 
 SIXTY-NINTH CONGRESS, FIRST SESSION 
 
 OUR PREARMISTICE LOANS 
 
 They were virtually our only substantial contribution to the carry¬ 
 ing on of our war during nearly three-quarters of the period of our 
 participation. They were the means of saving for us vastly greater 
 expenditure and of sparing hundreds of thousands of American lives. 
 We can no more consider to-day those advances as mere business deal¬ 
 ings between borrowers and lenders than did those who authorized 
 them nine years ago. 
 
 SPEECH 
 
 OF 
 
 HON. A. PIATT ANDREW 
 
 OF MASSACHUSETTS 
 
 IN THE 
 
 HOUSE OF REPRESENTATIVES 
 
 WEDNESDAY, JANUARY 13, 192G 
 
 ir 
 
 7849S—2005 
 
 WASHINGTON 
 
 GOVERNMENT PRINTING OFFICE 
 1326 
 
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 art 
 
 \ 
 
OUR PREARMISTICE LOANS 
 
 SPEECH 
 
 Off 
 
 HON. A. PIATT ANDREW 
 
 Mr. ANDREW. Mr. Chairman and gentlemen of the com¬ 
 mittee, I had asked for and hoped to be allotted a longer time 
 to speak on this question, because throughout the many hour3 
 of debate, and until the last speaker addressed the committee, 
 no one, so far as I can recall, has more than alluded to what, 
 in my judgment, is the most important aspect of the question of 
 the foreign debts, namely, their origin. Most of those who 
 have spoken during this time have treated these debts as if 
 they were, all of them, simply ordinary debts, and yet a very 
 large proportion of the debts were based on loans which 
 primarily were payments for services rendered to our coun¬ 
 try, payments made by the United States to the other coun¬ 
 tries associated with us in the war for very important serv¬ 
 ices, payments for services which saved our country many 
 precious lives and a vastly greater expenditure of money. I 
 can not, in the brief period that is allotted to me, more than 
 sketch an outline of the case which I should like to have pre¬ 
 sented to you, and, therefore, Mr. Chairman, I ask permission 
 to extend what I shall say to-day at greater length in the 
 Record. 
 
 The CHAIRMAN. The gentleman from Massachusetts asks 
 unanimous consent to revise and extend his remarks in the 
 Record. Is there objection? 
 
 There was no objection. 
 
 Mr. ANDREW. Most of the discussion has proceeded on 
 the assumption that our Government's foreign debts are all 
 of them without distinction, like any other kind of debts, and 
 that all of them bear the same moral as well as legal obliga¬ 
 tion. There are many, however, who question the validity of 
 that assumption as applied to certain of the debts and believe 
 that just settlements with some of the countries and our own 
 
 country’s reputation for fair dealing are involved in the issue. 
 
 78498—2005 3 
 
4 
 
 No one doubts that the debts of most of the debtor coun¬ 
 tries and some of the debts of all the debtor countries—those 
 arising from loans made after the armistice for purposes of 
 relief and reconstruction—are assimilable to ordinary debts 
 and involve the same obligations. But we can not overlook 
 the fact that a very large proportion of what were technically 
 loans were essentially payments made by our Government for 
 service rendered; and for these, no matter what may be their 
 documentary form, the moral right to demand reimbursement 
 is, to say the least, doubtful. In order to appreciate this, we 
 have only to recall the circumstances under which they were 
 made. 
 
 As a good deal of time has elapsed since then, you will 
 perhaps pardon my attempt to refresh your memories of those 
 circumstances. I shall recount only the bare facts and trust 
 to your individual recollections of what happened nine years 
 ago to supplement them. 
 
 Until the World War became our war the United States 
 Treasury had lent nothing—not a cent—to Belgium, France, 
 Italy, Groat Britain, or any other country engaged in that 
 war. It was during the first week of April, 1917, that the 
 great decision was made by Congress on the advice of the 
 President. In this Hall at that time he voiced the country’s 
 will in pledging to the task “ our lives and our fortunes, every¬ 
 thing that we are, and everything that we have.” We could 
 not send men to the front at once, for we had only a paltry 
 number wdio were trained and prepared; and although we set 
 to work with fabulous zeal to get vast numbers ready, it was 
 evident that many months—at least a year and probably 
 more—would pass before we should have troops to take part 
 in the war in which we were already launched. But if we had 
 no trained soldiers, we had factories and mines capable of 
 producing the supplies required by war; and within little more 
 than a week after the declaration a bill had been voted by 
 Congress to make these supplies available to the armies then 
 in the field. 
 
 This act began with the words— 
 
 78498—2005 
 
5 
 
 For the purpose of more effectually providing for the (our) national 
 security and defense, and prosecuting the (our) war—- 
 
 And it authorized the Secretary of the Treasury to establish 
 credits for governments— 
 
 then engaged in war with the enemies of the United States. 
 
 The act was intended to make possible our immediate par¬ 
 ticipation in what was now our war, and the credits were 
 authorized in order to place at the disposal of the armies 
 associated with us in the ordeal the iron, steel, copper, chemi¬ 
 cals, shells, rifles, powder, explosives, and other supplies which 
 we had or could produce in abundance and which they could 
 use in holding or pushing back the enemy. 
 
 The character and purpose of this act are so crucial for the 
 understanding of the whole question of what are called “ the 
 allied debts ” that I ask your indulgence if I recall to your 
 memory a few of the things said on the floor of this House 
 and of the Senate when the bill was under discussion. I will 
 cite only the words of influential Members, whose reputation 
 and standing are known to you all, men from East, West, 
 North, and South, irrespective of whether they were Republi¬ 
 cans or Democrats. There were no sectional or party lines in 
 those days when the country faced war. I think that you will 
 be interested to hear some of the opinions expressed at that 
 time, for they have a bearing upon the questions we face 
 to-day. 
 
 Mr. Mann, of Illinois, stated the case very clearly on April 
 14, 1917: 
 
 We are not prepared to place m,en in the field. We are not pre 
 pared to fight with our Army. We are not prepared to do very much 
 with our Navy ; not because we do not have some Navy but because 
 there is little opportunity for the Navy to engage in actual war at 
 this time. * * * The only way left to us is to help finance those 
 nations who are fighting our enemy. * * * I think it is our 
 highest duty in the making of war to give aid to those who are 
 fighting the enemy against whom we have declared war. 
 
 Then he added: 
 
 I only hope and pray that the aid thus given may be effectual 
 enough to end the war before we send our boys to the trenches. 
 
 78498—2005 
 
6 
 
 Let me quote next Mr. Fordney, of Michigan: 
 
 My idea is that those people are much in need of money to prosecute 
 this war. There is no other object on the face of the earth in the 
 minds of the American people in loaning European nations this money. 
 Their only purpose is to aid them in the best way possible to fight our 
 battle across the sea without calling upon our men to go there. 
 
 And now Mr. Mondell, of Wyoming: 
 
 We can not say and we shall not say that we will not send our 
 forces to any battle front where they may be needed to accomplish 
 the purpose of the declaration of the Congress; but we sincerely hope 
 that we shall not be called upon to do that to the extent of sending 
 men to fight overseas. But we can effectively and in the immediate 
 future arm and strengthen and support those who are, since our decla¬ 
 ration of war, fighting our battles. They have already been heartened 
 and strengthened by our declaration of participation iu the conflict, and 
 if we can hearten and strengthen them further by large supplies of 
 funds and strengthening of credit it is our duty and to our advantage 
 to do so. 
 
 That is what three Republican leaders thought Let us pass 
 to the other side of the House. First, Mr. Kitchen, of North 
 
 jar 
 
 Carolina, chairman of the Ways and Means Committee: 
 
 You will understand that they will he fighting with our money their 
 battles, and we will be fighting with our money our battles, too. 
 
 And he added, perhaps as an additional incentive— 
 
 We are of the opinion that most of this money that we will loan to 
 the Allies for the purchase of their bonds will of necessity have to be 
 expended in the United States. 
 
 Mr. Fitzgerald, chairman of the Appropriations Commit¬ 
 tee, did not seem to be very much concerned about eventual 
 payment. He said: 
 
 I should gladly vote to give $6,000,000,000 to the nations arrayed 
 on the same side with us if we could win this war without sacrificing 
 American blood and American lives. I have little sympathy with the 
 suggestion that possibly we will not get our money back. I care not 
 so much if we do if American blood and American lives be preserved 
 by the grant of the money. 
 
 Mr. Rainey evidently did not consider the credits authorized 
 by the bill as ordinary loans. He said: 
 
 We are not making this loan for the purpose of making an invest¬ 
 ment of our funds. We are making this loan in order to further our 
 78498—2005 n 
 
7 
 
 interests primarily in this World War, and from that moment when 
 the Congress of the United States declared that a state of war existed 
 between this country and Germany every blow struck at Germany by 
 any of her enemies was struck also in our interest. 
 
 Now, listen to Mr. LaGuardia, of New York, who, as lie said, 
 did not figure on the complete restitution of the $3,000,000,000 
 
 loan to be made to foreign governments: 
 
 Yes ; I believe that a good portion will be in due time returned, but 
 I am certain that some of it will have to be placed on the profit-and-loss 
 column of Uncle Sam’s books. Let us understand that clearly now 
 and not be deceived later. Even so, if this brings about a speedy termi¬ 
 nation of the European war and permanent peace to our own country, 
 it is a good investment at that. 
 
 And last of all, so far as the House is concerned, I want to 
 quote from another distinguished Member, who happily is also 
 still with us and held in the highest honor, Mr. Madden, of 
 Illinois: 
 
 We have already declared war, and we are not prepared to begin to 
 fight the war we have declared. If we can find somebody else to fight 
 the war for us with our money we ought not to hesitate to grant them 
 the credit which they want and must have. There is no way to win 
 this war except by men and money. We are not prepared to furnish 
 the men to-day, and somebody else is prepared to furnish the men if 
 we furnish the money. I do not agree with the statement that we are 
 furnishing this money for somebody else to wage war on their own 
 account, but we are doing our part to wage the war in which we are 
 engaged. 
 
 And again, on the same day, Mr. Madden said: 
 
 If the men who have not the money and who are able to fight are 
 willing to fight and offer their lives for the preservation of American 
 honor and for the liberty of the world, then the men who are not able 
 to fight but who have had the good fortune to make money ought to 
 help to pay the bill. * * * Everyone knows that we will not have 
 
 an army in the field for a year, or more than a year, and our duty to 
 posterity and to liberty is to do everything we can to-day to win victory 
 for the American people and for the liberty of the world. 
 
 Mr. Miller, of Minnesota, asked: 
 
 Do I understand the gentleman to mean that these loans we are going 
 to make are not to be repaid? 
 
 And Mr. Madden replied: 
 
 I would not care whether they were repaid or not. We are starting 
 
 out to win a victory, as I understand it, to maintain American rights; 
 
 78498—2005 
 
8 
 
 End if we can maintain American rights by furnishing money to some¬ 
 body willing to fight our battles until we are prepared to fight those 
 battles lor ourselves we ought to do it. 
 
 Mr. Moore, of Pennsylvania, inquired: 
 
 The gentleman knows that if the foreign governments do not pay 
 the money they borrow from us the people of the United States will 
 have to pay it? 
 
 And again Mr. Madden replied: 
 
 I am one of the American people who is ready to pay my share of 
 the obligation, and I shall have to pay as much of the money that is 
 to be raised in taxes as most of the men in the United States will 
 have to pay, and I am ready to do it to the extent of every dollar 
 I own. 
 
 What was said in the Senate was very like what had been 
 said in the House. I will quote only a few passages, and first 
 of all from the then chairman of the Finance Committee, Sena¬ 
 tor Simmons, of North Carolina: 
 
 Mr. President, we have not the men to send over there at present to 
 help fight our battles ; our Navy possibly can be of but very little use 
 in present conditions. It will be long, weary months of waiting before 
 we shall be able to render much assistance to our allies in the field. 
 The help this bill offers is an earnest and a guaranty which carries hope 
 and assurance of greater assistance and helpfulness in the future. It 
 will assure them that in this great cause we stand ready to risk life 
 and fortune. Uet us do this heartily, cordially, unanimously, and 
 without hesitation ; let us do it in the spirit of men who thoroughly 
 understand and comprehend the great cause in which we are fighting, 
 the great thing that we are undertaking, and who are entering into 
 it without thought of profits, without thought of financial loss, without 
 thought of the bodily discomfort, without thought of the sacrifice, hut 
 ready and willing to make every sacrifice. 
 
 A little later Senator McCumbee, of North Dakota, who 
 subsequently became chairman of the Finance Committee, spoke 
 as follows: 
 
 While we are recognizing that we are putting $7,000,000,000 into the 
 battle, we must not fail to recognize that we are not as yet putting in 
 a single one of our American soldiers, while blood is being jooured out 
 by our allies in unstinted measure. * * * It is probably true that 
 
 more than a quarter of a million men are going down to death or are 
 being wounded or captured every month during the contest. There¬ 
 fore, while they are suffering to that extent, we ought to be mighty 
 78408—2005 
 
9 
 
 liberal in the expenditure of money when we can take no part in the 
 real battle, which to-day is the battle of the American people. 
 
 Let me quote next from the present chairman of the Finance 
 Committee, Senator Smoot, of Utah: 
 
 The $3,000,000,000 which we are proposing to raise by a bond issue 
 for the purpose of advancing it to the Allies, I believe, Mr. President, 
 will all be repaid ; but if it should not be, or if not one penny of it is 
 returned, I wish to say now that every penny of it will be expended 
 for the defense of the principles in which we believe and which we 
 entered the war to uphold. Mr. President, I think that every dollar 
 that will be expended under the provisions of this bill, if it is expended 
 honestly, will he for the benefit of the United States, whether spent 
 by us or by the Allies. 
 
 The junior Senator from Iowa, Senator Kenyon, also spoke 
 on that day, and among other things that he said was this: 
 
 I w r ant to say this for myself, Mr. President, that I hope one of 
 these loans, if we make it, will never be paid and that we will never 
 ask that it be paid. We owe more to the Republic of Prance for what 
 it has done for us than we can ever repay. * * * I never want to 
 
 see this Government ask France to return the loan which we may make 
 to her. 
 
 Finally, a word from the senior Senator from Iowa [Senator 
 Cummins] and I think you will agree that he displayed not 
 only insight hut a foresight that places him in the ranks of the 
 prophets. He said: 
 
 I am perfectly willing to give to any' of the allied nations the money 
 which they need to carry on our war, for it is now our war. I would 
 give it to them just as freely as I would vote to equip an army or to 
 maintain a navy of our own ; hut I shrink from the consequences that 
 will, in all human probability, flow from the course which is sug¬ 
 gested in this bill. * * * I should like to give to the allied nations 
 
 $3,000,000,000, if they need the contribution, with never a thought of 
 its repayment at any time or under any circumstances ; I should like 
 to give that or whatever sum may be thought needed as our donation 
 to one phase of our own war, hut I fear that in the years to come the 
 fact that the United States has in its possession bonds of these great 
 countries which, when they emerge from the war will all be bankrupt, 
 will create an embarrassment from which the men of these times will 
 find it difficult to escape. I think it will cost us more to take those 
 bonds and to hold them against these governments than it wmuld cost us 
 to give the money, with a generous and patriotic spirit, to do something 
 78498—2005 
 
10 
 
 which for the time being, for the moment, we are unable to do with our 
 own Army and our own Navy. 
 
 I leave it to you, was not Senator Cummins right both in his 
 prognostications as to what would happen and his advice as to 
 what should have been done? 
 
 If you have followed the quotation which I have read, you 
 will have observed that throughout the discussion the credits 
 to be established were not considered as ordinary loans, much 
 less as investments. They were regarded by Congressmen and 
 Senators alike as America’s contribution to the prosecution of 
 the war at a time when we were unable to participate in any 
 other way. Among the leaders in both Houses, not only was 
 doubt expressed as to whether these loans would ever be repaid, 
 but indifference was declared both by Democratic and Re¬ 
 publican leaders as to their eventual repayment, and these 
 declarations of indifference were not very seriously challenged. 
 
 We had not entered the war for the sake of other countries. 
 It was not because Belgium was invaded or because France 
 was being crushed. It was not on behalf of England or Italy 
 or any other country than our own United States. It was 
 because American men, women, and children were being killed, 
 American rights trampled upon, American property destroyed. 
 It was because we had discovered the German Government 
 inciting an invasion from -Mexico and promising that country 
 a part of our territory in case of victory. It was our war on 
 our own behalf because of our own manifold and sufficient 
 grievances. 
 
 Yet, we were unable, and for 14 months were destined to be 
 unable to take any active part in the prosecution of that war. 
 By force of circumstance we were virtually placed in a situa¬ 
 tion like that voluntarily assumed by many men in the North 
 during the Civil War who having been drafted for the Union 
 Armies hired substitutes to take their places. Being unable for 
 lack of proper preparation to fight our own battles we were 
 obliged to hire substitutes, as Mr. Madden so clearly expressed 
 it at the time, “ to fight our battles until we were prepared 
 
 to fight those battles ourselves.” 
 
 78408—2005 
 
11 
 
 All that we could do during the 14 months of preparation 
 was to help other armies with funds. And that we did. And 
 the greater part of the loans whose settlement we are now 
 discussing is the result. I need not remind you that the serv¬ 
 ice to us ourselves of the credits we extended to our associates 
 during those months was no less than the service to them. 
 If at any time between April, 1917, and June, 1918, when our 
 effective participation began those associates had failed and 
 had been forced to make a separate peace, or if they had 
 chosen to make a separate peace, no one can estimate what our 
 war would have cost in American lives and treasure. No one 
 can calculate what their holding of the line saved to the 
 United States in men and in money. But certainly the funds 
 we offered freely to them then, and which we are reclaiming 
 now, saved a vast number of precious lives for us. 
 
 As General Pershing said in a speech in Denver, August 
 23, 1924: 
 
 If it had not been that the Allies were able to hold the lines for 15 
 months after we entered the war, held them with the support of the 
 loans we had made, the w T ar might have been lost. We scarcely 
 realize what those loans meant to the Allies and to us. 
 
 And then he added: 
 
 It seems to me that there is some middle ground where we should 
 bear a certain part of the expense in maintaining the allied armies 
 on the front while we were preparing, instead of calling all this money 
 a loan and insisting upon its repayment. 
 
 These are considerations, my colleagues, for us to remember 
 in discussing the return of advances made in 1917 and 1918 
 to our brothers in arms of Italy and Belgium, and to be re¬ 
 membered also later on when we discuss the advances made 
 to France during the same period. These advances were not 
 regarded at the time as ordinary borrowings. They were vir¬ 
 tually our only substantial contribution to the carrying on of 
 our war during nearly three-quarters of the period of our par¬ 
 ticipation. They were the means of saving for us vastly 
 greater expenditure and of sparing hundreds of thousands of 
 American lives. We can no more consider to-day those ad¬ 
 vances as mere business dealings between borrowers and 
 78498—2005 
 
12 
 
 lenders than did those who authorized them nine years ago. 
 [Applause.] 
 
 In arranging terms for the settlement of such advances we 
 should be short in memory and small in spirit if we did not 
 bear these facts in mind—if we did not look behind the strict 
 letter of the obligation. Congress, in fact, made provision for 
 such considerations when it instructed the Debt Funding Com¬ 
 mission to arrange settlements which they believed to be 
 “just,” and Congress will bear these facts in mind in ap¬ 
 proving or disapproving the terms of the several agreements 
 submitted by the commission to-day. 
 
 And now in the few moments that remain may I try to 
 express an opinion upon those agreements in the light of what 
 has gone before? 
 
 The settlements with Latvia, Esthonia, Czechoslovakia, and 
 Rumania were exclusively for postwar loans, and the con¬ 
 siderations to which I have tried to draw attention are not 
 applicable to them. Their loans were not incurred for carry¬ 
 ing on the war, but for local relief and stabilization after the 
 war. The arrangements made for repayment by these four 
 countries seem eminently fair. 
 
 The arrangement with Italy must also be considered generous 
 and fair. During the war, Italy borrowed from the United 
 States a little more than a billion dollars—$1,031,000,000—and 
 after the war somewhat over six hundred millions—$617,- 
 000,000. The terms arranged with Italy provide for repayment 
 between now and 1987 of successive amounts, which if dis¬ 
 counted at 4M per cent interest would have a present value of 
 about $538,000,000, or, if discounted at interest of 3 per cent 
 would have a present value of $791,000,000. In effect, what 
 we are really asking Italy to pay is a total roughly equivalent 
 to her post-armistice borrowings. We are forgiving or cancel¬ 
 ling an amount equal to the loans extended to Italy for carry¬ 
 ing on the war, and asking her only to repay the equivalent 
 of the loans made afterwards for rehabilitation purposes. The 
 Italian people rendered invaluable service to our common cause. 
 They made tremendous sacrifices of men and money. They 
 
 are hard pressed in consequence. We can well afford to share 
 78498—2005 
 
13 
 
 in tiiis way the expense of the battles they fought while we 
 were preparing. [Applause.] 
 
 I agree, however, with those who have expressed the idea 
 that what is fair for Italy would seem at least equally fair 
 for France. For without the slightest question, of all the 
 countries associated with us in the war, France bore the brunt 
 and the heaviest burden. Italy lost nearly 700,000 lives in the 
 war, but France lost nearly 1,700,000. The pensions for war 
 victims in the two countries respectively stand in about the 
 same proportions. The war damage on Italian soil reached a 
 total of about 20,000,000,000 lire, but the war damage in France, 
 wrought by most of the armies of the world, including our 
 own, amounted to over 100,000,000,000 francs, or fivefold that 
 of Italy. The internal debt of Italy amounts to about 90,- 
 000,000,000 lire; that of France to more than three times as 
 much, or roughly 300,000,000,000 francs. The foreign debt of 
 France is more than double that of Italy. If justice and 
 equity demand leniency in the case of Italy, it would seem 
 even more so in the case of France. 
 
 And what is fair for Italy would seem to be equally fair for 
 Belgium, the most appealing of the nations that suffered in the 
 war. In all the hue and cry about “ war guilt ” no one, not 
 even the ex-Kaiser, has ever accused Belgium of responsibility 
 for it. In everyone’s opinion Belgium was the most innocent 
 as well as the most complete of the war’s victims. I must con¬ 
 fess to no satisfaction in one feature of the settlement with 
 Belgium, and that is this: Of the countries that loaned her 
 money when her territory was under the Kaiser’s heel and her 
 Government was in exile, the United States has the distinction 
 of being the only one to demand repayment of such loans. Eng¬ 
 land loaned her more than $500,000,000 at that time and 
 France loaned her more than $800,000,000, and they both are 
 in greater need of payment than we are, yet they have not 
 asked and never will ask Belgium to repay. The United States 
 loaned Belgium less than a third as much—$171,000,000—and 
 the United States, though the richest country on the earth, is 
 the only one to ask Belgium for reimbursement. I can not feel 
 
 proud of the distinction. The agreement of the Debt Funding 
 78498—2005 
 
14 
 
 Commission to eliminate all interest on these loans, which is 
 a virtual cancellation of more than three-quarters of their 
 capital value, seems a half-hearted acknowledgment of the 
 equities in the case which is neither logical nor generous. I 
 shall vote for the Belgian settlement with reluctance on that 
 account. 
 
 One more word in conclusion. It is not certain that “ ca¬ 
 pacity to pay ” is the only factor to be taken into account in 
 arranging these settlements. It is not clear that “ just ” set¬ 
 tlements according to the intent of Congress can be made 
 simply by applying that formula, by merely estimating how 
 much these peopje can be made to pay, or how much they and 
 their children and grandchildren may be able to pay between 
 now and the year 1987 through toil and taxes and squeezing 
 the last penny out of Germany. I am not sure that even in 
 terms of avarice our people would win the greatest possible 
 gain by rigid adherence to this principle. I suspect that they 
 will make more money in the long run by treating other peoples 
 as prospective customers rather than as debtors, to be forced 
 through bankruptcy. And I fully believe that if we should 
 insist upon this formula of “ capacity of pay ” during the next 
 62 years we would not contribute as much as we might to the 
 reestablishment of good will among men and of peace among 
 nations. By keeping up such pressure for several generations 
 we would promote better relations neither between ourselves 
 and our former allies nor between them and the ex-enemy 
 
 countries. [Applause.] 
 
 78498—2005 
 
15 
 
 EXTENSION OF REMARKS 
 
 OF 
 
 HON. A. PIATT ANDREW 
 
 OF MASSACHUSETTS 
 
 In the House of Representatives 
 
 Saturday, January 16, 1926 
 
 Mr. ANDREW. Mr. Speaker, under the permission granted 
 me by my colleagues, I desire to insert in the Record the text 
 of the resolution which I introduced last week asking that 
 terms as favorable as those which we yesterday voted for the 
 Kingdom of Italy be extended to the Republic of France. 
 
 In substance, as I explained on Wednesday, we have agreed 
 to wipe off from the account with Italy a sum equal to that 
 which the United States loaned to Italy for carrying on the 
 war. We only ask Italy to repay in the next 62 years an 
 amount equivalent to that which the Italian Government bor¬ 
 rowed after the armistice. 
 
 In view of the fact that France lost nearly 1,700,000 of her 
 youth in the war, while Italy lost about 700,000, and that the 
 devastation in France caused by the war was fivefold that in 
 Italy, justice and equity would seem to demand at least equal 
 forbearance toward France. 
 
 The following is the text of the resolution (H. J. Res. 101) : 
 Joint resolution authorizing the extension to the Government of Franee 
 of as favorable terms for the settlement of its obligations as have 
 been or may be granted to any of the other governments asso¬ 
 ciated with the United States in the World War in the settlement 
 of similar obligations 
 
 Whereas the acts of April 24 and September 24, 1917, authorizing the 
 Secretary of the Treasury to establish credits for governments “ then 
 engaged in war with the enemies of the United States ” declared that 
 these credits were “ for the purpose of more effectually providing for 
 the (our) national security and defense and prosecuting the (our) war, 
 aud these acts were adopted at a time when the United States, then 
 engaged in war, had no trained troops with w r hicli to oppose the enemy, 
 aud the credits so authorized were intended to make available for the 
 troops of other nations associated with us the iron, steel, copper, chemi¬ 
 cals, shells, rifles, powder, explosives, and sundry other supplies which 
 they could use in holding back the enemy and which then existed or 
 could be produced in the United States in abundance ; and 
 
 Whereas a considerable part of what is to-day charged against the 
 Government of France is the cost (at war prices paid to American 
 manufacturers) of such supplies used by French soldiers during a 
 period of approximately 14 months after our entrance in the war, 
 when the United States was unable to contribute men in substantial 
 numbers, and such supplies represent the principal contribution made 
 by the United States to the prosecution of the war during the greater 
 part of the 19 months of our participation, in w T hich time hundreds of 
 thousands of the youth of France were mutiliated aud killed while our 
 troops were being mobilized and trained ; and 
 78498—2005 
 
16 
 
 'Whereas the Government of France confronts to-day a most serious 
 financial situation— 
 
 (1) Because of debts amounting to more than 300,000,000,000 francs 
 Incurred in the prosecution of the war, to which have been added 
 debts amounting to approximately 80,000,000,000 francs incurred in 
 restoring the homes, schools, and churches, the stores, factories, and 
 mines, the bridges, railroads, and farms of France destroyed by the 
 armies of the world, including our own; 
 
 (2) Because of inability to recover from the ex-enemy governments 
 but a small fraction of the reparation for such destruction promised 
 by the terms of the armistice, which our Government not merely 
 agreed to but formulated ; 
 
 (3) Because nearly 200,000 of the 893,000 buildings destroyed in 
 France have still to be rebuilt, and annual pensions have to be paid 
 to widows, orphans, and dependent parents of 1,700,000 French sol¬ 
 diers who died in the war and to more than a million mutilated and 
 disabled French veterans (a heavy burden because of the numbers in¬ 
 volved, even though the individual pension rarely reaches a fifth of 
 the amount paid to our own war victims) ; 
 
 (4) Because the money of France, seven years after the war, is 
 depreciated to less than a fifth of its former value, so that all that 
 the French people had saved and invested in bonds or savings accounts 
 before the war, and all that they loaned to their Government for 
 carrying on the war has ali'eady lost more than four-fifths of its value; 
 
 (5) Because the French people in recent years have been taxed to 
 fully 20 per cent of their total income, or nearly double the heavy 
 percentage prevailing in the United States, and their treasury has 
 been unable to meet bonds, maturing this year amounting to many 
 billion francs, without vast additional issues of paper money, which 
 threaten the misfortunes of further depreciation, on all of which 
 accounts the Government of France has greater financial difficulties 
 to overcome than at any time since the end of the eighteenth century ; 
 and 
 
 Whereas in the period of America’s most extreme need France gave 
 generous aid to the United States not only (1) in loans, when no 
 other country would extend her credit (on some of which interest was 
 remitted, but also (2) in outright gifts of money, and above all (3) 
 through an expeditionary land and sea force, which contributed indis¬ 
 pensably to the victory at Yorktown and our independence, which is 
 estimated to have cost France over $700,900,000, and for which she 
 asked no recompense whatever; and 
 
 Whereas the situation is to-day reversed, and while France is in 
 extremities, the United States occupies, as President Coolidge has said, 
 “ a position unsurpassed in former human records,” being far more 
 prosperous than before the World War, with no ruins to repair, a 
 currency that is unimpaired, half the world’s gold in our vaults (the 
 greater part of which has been drawn from other countries since the 
 World War began), and being able to provide liberally for our own 
 war victims, to reduce taxes, and at the same time pay off annually 
 a billion dollars of the Government’s debt: 
 
 Resolved, etc.. That the World War Foreign Debt Commission is 
 urged to take account of the circumstances and equities heretofore 
 named and is authorized to extend to the Government of France as 
 favorable terms for the settlement of its obligations as have been or 
 may be extended to any of the other governments associated with the 
 United States in the World War for the settlement of similar obliga¬ 
 tions. 
 
 78498—2005 
 
 O