Debts & Defaulters

The Attorney General is not a law maker but last week he made what amounted to a law. Lately Congress paved the U. S. statute books with a good intention when it enacted the Johnson Law, forbidding any U. S. citizen or firm to float loans or extend new credit to any foreign government in default on its debts to the U. S. Unfortunately the Administration itself did not know what that meant. Secretary Hull had to ask Attorney General Cummings whether: 1) a nation that had made token payments on its War debts was in default; 2) Soviet Russia was in default because it had not made payments on the old Kerensky debt.

Mr. Cummings could have given half a dozen different replies making the Johnson Act into any one of half a dozen different laws. By his opinion last week the LAW became: 1) token payers (Czechoslovakia, Great Britain, Italy, Latvia and Lithuania) are not defaulters, therefore may receive new loans; 2) Soviet Russia is in default. Until the courts disagree, some future Attorney General gives a new ruling or Congress passes another law, Mr. Cummings' decision will be final.

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