Tokens & Cheers

Of the 13 sovereign states which owed $144,000,000 to the U. S. on June 15 last week only small, green, watery Finland, self-styled ''Land of 40,000 Lakes," showed sufficient character to pay her War debt in full.

Finland's war was a savage, desperate, last-ditch fight in 1919 to hurl Russian Bolsheviks back from her beloved lakes. Finnish valor perhaps saved pink & socialist Scandinavia from going red. Exhausted though victorious, Finns obtained from the U. S. Congress credits for grain and other foodstuffs, ran $8,281,900 into debt. Three years later when President Harding offered to fund all Europe's War debt on the basis of '"capacity to pay''--payments to be made over 62 years--Finland was the first state to send a delegation which signed on Washington's dotted line, May 1, 1923.

Two Finns last week shared honors when Finland paid: staunch, old President Pehr Evind Svinhufvud (properly translated "Boar's Head" not "Pig's Head") and smart, young Chairman Risto Ryti of the Bank of Finland. Scrupulous, they paid in full--$148,592. No fools, they paid in silver which cost Finland 36-c- per ounce on the world market last week but was accepted as worth 50-c- per ounce by the U. S. Treasury under the Thomas amendment to President Roosevelt's Agricultural Relief Act (TIME, May 22). Great powers which did not pay in full (thus placing themselves legally in default) were headed with greatest dignity by the Government of His Britannic Majesty. After frantic cabled haggling for 48 hours between Whitehall and the White House a formula was found. In Washington tall, ruddy British Ambassador Sir Ronald Lindsay delivered to the State Department a note offering to pay 10-c- on the dollar of Britain's debt installment.

To this President Roosevelt replied with a tactful assurance which British Chancellor of the Exchequer Neville Chamberlain read out to a cheering House of Commons. Read Mr. Chamberlain, quoting the President, " 'Inasmuch as the payment made is accompanied by a clear acknowledgment of the debt itself, in view of these representations and of the payment, I have no personal hesitation in saying that I do not characterize the resulting situation as a default.' " (Loud House of Commons cheers.) Speaking for himself. Chancellor Chamberlain wound up beaming, "I need only add that we propose to make this payment in silver [cries of 'Hear! Hear!']. . . ." Amid further cheering and compliments to President Roosevelt in which M. P.'s of every British party joined the House went home to bed. "The supreme merit of this arrangement," wisely observed the London Times, "is that it is neither default, which was unthinkable, nor payment in full which would have merely left the old dilemma." Specifically Britain, which owed $75,950,000 last week, made a silver token payment worth some $7,200,000 but accepted as $10,000,000. Italy promptly followed with a $1,000,000 silver token for her $13,545,000 owed. Czechoslovakia, normally content to follow France but nowadays striking out as the acknowledged leader of the Little Entente, tokened $180,000 for $1,500,000. Rumania chipped in $25,000 for $1,000,000; Latvia which owed $118,961 paid $6,000--and that was all.

Totaling together Finland's full payment and the various tokens, the U. S. Treasury received last week $11,334,540 instead of $144,000,000.

Paris papers frankly called the British and all token payers simpletons. Default to the logical minds of Frenchmen is default -- but it was not so last week in the French Government's suave language of diplomacy. "The French Government," according to their note delivered in Washington by new French Ambassador Andre de Laboulaye, "is obliged to defer payment of the sum due June 15 [$40,738,000]. But it intends in no way to break unilaterally engagements freely entered into, and desires to renew to the Federal Government [of the U. S.] the assurance that it is always ready to give by all opportune means the most active help to finding a satisfactory solution."

In other words France will defer payment until the U. S. consents to make her deference permanent.

Stern to all defaulters except Britain last week, the President caused sharp notes to be sent to France, Italy, Poland and Belgium. Italy's $1,000,000 token was called "unsubstantial," France was coldly reminded that she defaulted not only on June 15 but last year on Dec. 15. Next day Professor Moley was reported to be drafting an informal schedule of Washington "debt conferences." Reporters were told that France need not expect to be included on this schedule until after she has paid at least a token.

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