The world press has paid little or no attention recently to the one problem which has occupied, almost to the exclusion of all others, the minds of financiers, economists, and newspaper writers We have in mind the problem of international debts. The pretentious systems of Dawes, Young, and other financial experts, have crumbled like houses of cards.

Didn't Mr. McKanna, well-known English financier and economist, in his recent appeal to American bankers, proudly declare that Britain always pays its debts"?

Wasn't it only recently that William Randolph Hearst, the American newspaper king, incensed by the refusal of European countries to pay their debts to America, proclaimed through his newspapers:

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"Let us not be the sentimental idiots that those countries take us for. Who will trust a nation that does not pay its debts? These Europeans entered into a gentlemen's agreement among themselves in order to saddle us with their dishonest policy of debt cancellations. What kind of an agreement would scoundrels sign and live up to? How can we call men whose honor is worthless, gentlemen?"

Europe, in the meantime, was on her toes, and, in its turn, counted the debts that America has owed since the Civil War of 1864. Francis Gribble, in his book What America Owes to Europe, estimates that America owes Europe nine and one-half billion dollars. America did not pay its debts at that time, just as now, European countries do not pay their debts to the United States.

How did these debts arise? They arose out of the war; the money was used for war purposes. France loaned money to her allies. In her turn, France borrowed money from England. When the money situation became tight in England, she resorted to borrowing from the United States in order to be able to finance 3the fighting allied countries. The proportions of this immense subsidizing of the war can be seen from the fact that the indebtedness of fourteen non-paying countries to the United States alone, by the end of June, 1934, reached the staggering total of nearly twelve billion dollars. The payments on this international debt were actually discontinued in 1931. The first to refuse to pay was Germany, which discontinued her reparation payments. During the same year, as a result of the catastrophic financial situation that developed in Germany, the President of the United States, Mr. Hoover, at the time proposed a moratorium on the debt payments of the European countries for one year, provided that the Allies, in their turn, extended the moratorium to German payments. The year passed and none of the countries concerned renewed their payment in full. The debts are still not being paid.

Besides the United States, England, France, Switzerland, and Holland, must be included among the creditor nations. The total of debts due to these countries exceeds fourteen billion dollars.

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But while the United States has no debts, England and France are heavily indebted to the United States. France, in addition, owes money to England. A number of other countries owe money to France. The jumbled-up merry-go-round of international debts, when reparations were pumped out of Germany and given to the Allies, and from those countries handed over to the United States in order that later on, some part of the money would be given back to Germany in the form of loans, doesn't work. Nobody pays. Even England, which did not want to set a bad example to her own debtors, and, therefore, for a time met promptly all her obligations to the United States, has discontinued payment of her socalled token payments. Now she pays neither the full amount nor the ten per cent of the installment due.

After the term of Hoover's moratorium expired, Germany did not renew her reparation payments. In 1932, a special conference was called in Lausanne, which decided to slash German indebtedness to three billion marks. Creditors have not received a penny of this sum. To the number of countries which discontinued payments, many small countries of South America, Turkey, Bulgaria, Greece, 5Rumania, Jugoslavia, and China must be added.

State obligations, state promissory notes, agreements, pacts of almost all countries have become, as a result, mere worthless scraps of paper.