800.51W89 Belgium/214
The Belgian Embassy to the Department of State
In his declaration of the 23rd of November last,64 the President of the United States recalled the bases on which the debt agreements had been made. The settlements made, he said, took account of economic conditions and of the capacity to pay of each debtor nation. In his annual report for 1924–1925, the Secretary of the Treasury of the United States defined the idea of capacity to pay. Such capacity does not imply the obligation, on the part of the foreign debtor, to pay to the full limit of his present or future capacity. The debtor government, he said, must be able to preserve and improve its economic position, assure the balancing of its budget and place its finances, as well as its monetary system, on sound bases. It must also be able to maintain, and, if possible, improve, the standard of living of its citizens.
In its note of December 5th [6th], the Belgian Government set forth what were the effects for Belgium of the moratorium, the initiative for which was taken by the President of the United States in 1931, and of the Lausanne agreement which resulted therefrom. Actuated by a spirit of solidarity, Belgium, being desirous of contributing to general economic recovery, sacrificed a credit which was guaranteed to her by the most solemn engagements, and which constituted an essential element for the balancing of her public finances. This sacrifice to which she consented, added to the effects of the general paralysis of economic activity, has brought her face to face with the most serious financial difficulties. Belgium had hoped that a friendly arrangement taking account of this situation might have been reached before the payment date of December 15th. The Government of the United States has judged it to be impossible.
Under such conditions, the Belgian Government cannot but state that these circumstances prevent it from resuming, on December 15th, the payments which were suspended by virtue of the agreement made in July, 1931. Belgium is still disposed to collaborate fully in seeking a general settlement of intergovernmental debts and of the other problems arising from the depression.
- Department of State, Press Releases, November 26, 1932, pp. 335–340.↩