Statement on France's Ratification of the Mellon-Berenger Agreement for Settling Its War Debt.

THE PRESIDENT said:

"I am very much gratified to learn that France has ratified the agreement providing for the settlement of the debt of the French Republic to the United States, thus disposing, in so far as lies within her power, of one more of the great financial problems left over by the World War. With the high sense of honor and financial responsibility that have always characterized the actions of the French people, it was always certain that to the full extent of their ability they would meet their obligations. The definite settlement of the amounts to be paid in complete discharge of this debt is a cause for mutual satisfaction, removing as it does a question that has occasioned much controversy and debate.

The settlement calls for payments of $35 million in the fiscal year 1930, gradually rising over a period of 11 years until they reach a maximum of $125 million annually.

"I think in fairness to the American people I am justified in mentioning the liberality of the settlement. The total debt of the French Republic to the United States as of June 15, 1925, was approximately $4,230 million. On a 5 percent basis, which is the rate of interest borne by the [p.238] obligations given by the French Government, the present value of the payments provided for by the Mellon-Berenger agreement is $1,680 million, or, in other words, a reduction of approximately 61 percent of the total indebtedness. This settlement in effect wipes out the entire indebtedness of France which arose during the war period and simply provides for the payment of advances to France after the armistice, which aggregate, including accrued interest, $1,655 million. While some of the after-armistice advances were made for the liquidation of obligations incurred in this country by the French Government during the war, considerable advances during the war period itself were for permanent improvements; for shipping; for the meeting of obligations to private creditors incurred prior to the entrance of the United States into the war, and advances to the Bank of France for credit and exchange purposes.

"I am giving these facts so that in recognition of the honorable way in which France has to meet its obligations, they will understand that our people too feel that this settlement involves a measure of sacrifice on their part. There is every reason to hope and believe that such an agreement, based as it is on mutual sacrifice and consideration, cannot but promote a better understanding between these two great nations and serve further to cement a friendship that has lasted for a century and a half."