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The New Zealand Railways Magazine, Volume 6, Issue 7 (February 1, 1932.)

[section]

The Debt Chain—Rival Links—“Commercial” Compromise—“Scotland is a Spirit”—Separate—Yet One!

“Reparations and inter-Governmental debts are separate and distinct subjects,” said the President of the United States Chamber of Commerce, on 21st January. In so saying, he implied that if Germany carried out Dr. Bruening's New Year threat not to pay reparations to the European and British Empire countries receiving reparations, the United States Government would not necessarily regard those reparation-denied Governments as being entitled to corresponding (or any) reductions in their debt burdens to the United States. Although the parallel is imperfect, let us liken the United States to the mortgagee of a house property, France to the mortgagor-owner, Germany to the tenant. France hears that the tenant Germany is not going to pay the rent, but mortgagee America expresses complete unconcern, and says that interest and rent “are separate and distinct subjects.” So they are, but in practice one knows that if the rent stops, the interest may stop too. And it may be unwise to foreclose!