Evening Star Newspaper, June 17, 1929, Page 5

THE EVENING STAR. WASHINGTON, D. €, MONDAY, JUNE 17, 1929, 5 | ARE PRAISES 5. DEBT EXPERTS pepss of Reparations Par-| 2 ey Due in Main to Them, - Premier Says. Wy the Associated Press. NEW YORK, June 17.— Raymond Poincare, premier of France, in the July dssue of the magazine, Foreign Aftairs, warmly praises Owen D. Young and J.'P. Morgan for the part they played in the re- cent reparations conference and calls on all gov- ernments con- cerned to “not delay an hour” in acting upon the experts' Te- port “The happy end, after such a weary time of waiting M Poincare writes, “is due in large measures fo the patience, compe- tence 2nd good temper shown by Mr. Young and Mr. the American experts. \e American experts. teful task of between deblor creditors )l to keep alive general good will and o lnspire every one with a strong desire not 1o let the conference fail In his article, which marks the tenth anniversary of t signing of the treaty . be celebrateed June 28, M. Poincare says that “the F experts agreed that their country assume a very large part of the com- mon sacrifice in order to demonstrate their conciliator attitude and make possible the general arrangement Which was finally reached.” “The program laid down will not fndemnify France for even one-half the sums she had to spend during these past 10 years to restore the dev- astated regions,” he writes. “She will get nothing to indemnify her war vic tims—mutiles, widows, orphans. A great load will continue to weight down the French budget “None the less, if Germany executes her payments to us regularly, we shall be in a position at least to pay our foreign debts punctuall Premier Poincare. who serv- and the The entire Nibelung drama of Fried- 'COMPARISON OF | AND MELLON Both Secretaries S}\owcd Extraordinary Fiscal Ability in Stabilizing Finance Fouowing War. BY FREDERIC J. HASKIN. | Hamilton and Our First War Debt. The oft-repeated statement by his admirers that Andrew W. Mellon is the greatest Secretary of the Treasury since Alexander Hamilton may or may not be 1 judgment of history. but it is idly coined. It has act that many points ist between the Federal | financial problems which the first Sec- retary of the Treasury and the present one faced. Hamilton faced the problem lof setting up the finances of a wholly new republic and rebabilitating _its credit in the wake of destructive war. Mellon faced the problem of adjusting the finances of the Nation to the new economic and industrial era which opened following the World War and of adapting the composition of the pub- lic debt to the circumstances which shadowed that conflict. The compari- son, therefore, was not accidental; it was irresistible | “Today it scems difficult to realize that to Hamilton's fiscal policy quite | possibly is due the existence of {he Re- public. There was in his day a very ibstantial party which wanted a King for the United Coloni which had just won thelr independ from Great Britain. ‘There is strong evidence that | John Ads ought u throne. We know | that Washington was offered one. Aaron | Burr assuredly would not have put aside & crown. Indeed, he risked much for one. It was Hamilton who prevented this in large measure by impressing his financial policy upon the infant Re- | public, | Cut Per Capita Debt. | At the close of the War of the Amer- | ican Revolution the national debt was $80,000,000, principal and interest. This | was & per capita debt of $20. At the | outbreak of the World War the per | capita debt was $11. At its peak it was $228. Today it is down to $142. | | "Economic_conditions were such that | & debt of $20 per capita seemed enor- mous, especially in view of the exhaus- tion the Revolutionary War had brought to everything but the vast natural re- sources of the Nation. Much of this indebtedness had been created by indi- | vidual colonies_on their own credit. | | The Northern States owed much more | | than the Southern ones, which were | richer as the result of the thriving HAMILTON BASED ON FACT| properly be regarded as the birth date of our national debt, for it then took on a fixed status. The funding scheme divided up the debt into various matur- ities, with the interest rate being grad- portions of the debt. Inasmuch as {many holders of the bonds had pur- at a heavy discount, Hamilton was able | to achieve this refinancing. The bond- | holders were making a huge profit by |the bringing of the bonds to par through recognition of the obligation {by the Federal Government, and any | interest received, even 3 per cent, was clear manna. It is interesting to note that the coa- soldation of the public debt and the founding of the City of Washington !and its designation as the Capital of the United States came about almost ! coincidentally. Indeed, ducements offered by Hamilton to bring the rich Southern States into agree- ment on pooling the colonies’ debts was the agreement that the National Capi- tal should be Il ed in a Southern region. In our early national finan- cial worries, therefore, can Le found the reason why the Capital City is on It took all the genius of Hamilton, ably backed by the influence of Thomas Jefferson, to get the States to pool the debt Hamilton’s “Report on the Public Credit” still is the Bible of American Federal finance—the tablets of stone In it he so ably analyzed the situation that the 13 separate entities agreed to join their lots, recognize the debt and tax themselves uniformly to pay it Once joined and bound together by this fianclal tie, subversive movements to alter the form of government were de- feated in no small measure by the un- willingness of the benefiting States— | those which had had their burdens liehtened—to consent. Moreover, the | individual holders of the Federal Go ernment bonds, now that they we recognized. were not going to change a known and certain debtor in the form of the Republic to an unknown and | highly uncertain one in the form of a | King. at New York or Philadelphia Created Public Confide; Hamilton's public debt management was so successful that in 1795 he was able to report that the ordinary debt How Hamilton Managed. A $12,000,000 loan was promptly voted by Congress to pay up the arrears of interest and the past due portion of the principal of the foreign-held debt. This ! ioan was placed in Holland Hamilton then embarked upon a re- | funding program. singularly like to the one englneered by Secretary Mellon upon taking office in 1921. The Kevo- lutionary War debt was bearing interest | At the rate of 6 per cent. Hamilton initiated & funding scheme, to which | I Grass RUGS $ 3.95 GROGAN'S 817-823 Scventh St.N.W. 8x10 or 9x12. Many uated down to as low as 3 per cent on | | chased them from the original buyers | one of the in-| { the banks of the Potomac rather than | ITFAMILY (SHOE ETOR | dence in these first United States secur- | ities was created and there began an tive speculative trading in them. This was growing and new indebtedness was | | created from time to time to meet pub- | |lic needs, but there was never a steady | an act of August 4, 1790. This might |stood at only $77,496,000. Public mnfl-“wu paid off. To be sure, the Nation : “SKIPPER" LlNDBERGH TAKES ON SUPPLIES ‘ bassador to Mexico, remained below decks during the Mouette's stay in port, The cruiser departed toward Long Island at 5:05 o'clock after taking on board 180 gallons of gas, 75 pounds of was wholly to Hamilton's satisfaction. | accumulation, no fatal habit of NeW Famed Bridegroom Puts In at|ic& And mackerel and a newspaper. He knew that if the people were enough interested in bonds of the new Republic to trade in them a market existed. That was what he wanfed; that was what | the new Government needed. ~Indiffer- ence alone could have defeated his plan. Along with these constructive financ ing measures Hamilton, as Secretary of the Treasury, also was wrestling with the problem of Federal taxation—a problem far greater than it is today. | Only the most indirect and invisible taxes would be tolerated by the proud citizens of the sovereigm States, who v s of the central author- be exercised, the most adroit measures of taxation. Hamilton adjusted taxes to the end that business should feel the least possible restraint, Again_appears the parallel with the policy of Mr. Mellon, whose measures looking toward a minimum tax on bus ness, coupled with rigid economy, 1 made his administration of the Tr ury portfolio so conspicuously su ful. It may be something of a curiosity to note that the first budget of the Federal Government called for only $2.839.000, and of this sum all but $600,000 for payment of interest and amortization of the public debt It was not long before the entire debt ve As- r obligations bein | frozen ones. | Washington had warned against “that } progressive accumulation of debt which | must ultimately endanger all govern- ment.” In his “Report on the Public| Credit” Hamilton himself had said: | | “As the vicissitudes of nations beget a perpetual tendency to the accumulation of debt, there ought to be in every | government a perpetual, anxious and | unceasing effort to reduce that which {at any time exists as fast as shall be | practicable, consistently with integrity and good faith.” So faithfully had these precepts been followed, so well had the Hamilton poli- cles functicved, that when Albert Galla- tin, the Secretary of the Treasury who | is mext conspicuous in American’ fiscal affairs, took the reins the public debt was below $80,000.000, although the population had nearly 'doubled, bring- | ing the per capita debt down to about Tomorrow g piled on top of old| | llatin and the War of | L o | An hour after the last match of the season had been played the grandstand | of the Dell. England, foot ball grounds | was recently destroyed by fire. pmon. Providence—Buys Ice, Mackerel and Newspaper. By the Associated Press. PROVIDENCE, R. I, June 17.—Capt. Charles Lindbergh of the cruiser | Mouette, best-known skipper on Long | gaturday Island Sound this season, steered his 38-foot motor craft into New Harbor, | Blogk Island, at 3:40 yesterday after- He made fast to the new dock, t did not come ashore for more than an_hour. John spoke to “Lindy” when he came ashore about 4 o'clock, says the honeymoen | navigator is well tanned, and his bride, the former Anne Morrow, daughter of | Dwight W. Morrow, United States Am- | WHITE SERGE TROU SI::_RS $7.65 Plain_or Fancy Stripes EISEMAN’S, 7th & F |/ Vienna to House Population. VIENNA, June 17 (#).—The Vienna municipal government will spend $56.- 500,000 in building 30,000 flats to ac- commodate the increased population. 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