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1932 › Franklin D. Roosevelt (Democratic) › European war debts and reparations
No cancellation of the war debts — make payment possible by restoring trade
pledge_forwardspecific_pledgecandidate_directevidence A Diplomacy & International InstitutionsEconomy & Fiscal Policy⚡ European war-debt crisis similar solutions · similar reasoning
Solution
Oppose cancellation of the debts owed by foreign governments; instead lower tariffs and revive trade so the debtors can pay from trade profits.
Rationale
The Republican position — "demanding payment and at the same time making payment impossible" — forced the moratorium; after Lausanne the danger is a united European front against the United States, driven less by the debts than by American trade barriers.
Statements (3)
We oppose cancellation of the debts owing to the United States by foreign nations.
That admirable document, the platform which you have adopted, is clear. I accept it 100 percent.
Blanket endorsement of every plank.
The debts will not be a problem -- we shall not have to cancel them -- if we are realistic about providing ways in which payment is possible through the profits arising from the rehabilitation of trade.
Follow-through
superseded
No cancellation was ever offered — but neither did restored trade make payment possible. Britain made token payments in 1933, then all debtors except Finland defaulted; the Johnson Act (April 1934) barred loans to defaulters and ended even token payments. The debts were never collected or formally cancelled.
Mechanisms
| Date | Type | Name | Effect | Consistent? | Source |
|---|---|---|---|---|---|
| 1934-04-13 | statute | Johnson Act (Foreign Securities Act) | As it also banned token payments, payments from debtor countries stopped entirely following its passage, with the exception of Finland , which still continued to pay its debt. | partly | Johnson Act - Wikipedia |
Obstruction
economy Debtor default after the collapse of the London conference and the abandonment of gold.
Assessments
Default made the cancellation question moot.
The act was a response to nonpayment of war debts from World War I .
Reception (1)
When the debtors asked for postponement after the election, the press split between refusing any reduction (Denver Post, Ohio State Journal) and cancellation as the only cure (Baltimore Sun); both read Roosevelt as bound by the no-cancellation plank.
The best way for the United States to settle the debt prob- lem is to say to Europe, 'We will not consider any proposition for cancelation or further reduction of the debts you owe us.'
Other positions on this issue
- A twenty-year moratorium on the war debts, writing them off in proportion to each nation's purchases of American goods — Alfred E. Smith, 1932 specific_pledge
- The 1931 German moratorium and standstill agreements stemmed European collapse and will be built upon — Herbert Hoover, 1932 specific_pledge
- No cancellation of war debts; apply any annual payment to opening foreign markets for American farm products — Herbert Hoover, 1932 specific_pledge
- Entry into the World Court and cancellation of the war debts (the record that made him 'politically unpopular') — Newton D. Baker, 1932 directional_stance
- Cancel the war debts (against cancellation of reparations) and raze the tariff wall — Norman Thomas, 1932 specific_pledge
- Use every effort to collect the war debts due from foreign countries — Alf Landon, 1936 directional_stance
1932-fdr-oppose-war-debt-cancellation · created by claude-fable-5-1 · review: unreviewed