DEBTS TO AMERICA.

Auckland Star, Volume LII, Issue 172, 21 July 1921, Page 5

DEBTS TO AMERICA.

DEFERB.ING THE INTEREST. ' (Kecelvetl 10..10 .1.111 1 WASHINGTON, July 20. Mr. A. Mellon (Secretary to the Treasury) told the Senate Finance Committee that the American Government considers itself under such obligation to foreign debtor nations that it must defer interest payments on their debts.-— (A. aud N.Z. Cable.) European countries, including Great ; Britain, owe America about £2,000,000,- ---, 000. This debt was incurred in the form !of war stores and foodstuffs supplied by the United States to the Allies in the prosecution of the war. The Allied countries of Europe owe Great Britain about £1,750,000.000. Some of this debt is represented by war stores manufactured in Great Britain, but much of it is represented by American war stores and foodstuffs for the Allies, for which (ircat Britain accepted financial responsibility. France owes Great Britain about £310.----000,000, and she owes America about £000,000.000. Italy owes Great Britain £450,000,000. and "she the United States £300,000.000. Great Britain owes the United States about £800.000,000. It is impossible to pay these debts at present, and England alone has been able to keep up interest payments. The other nations are experiencing the greatest difficulty in keeping afloat without paying i off their huge interest accumulations, 'and the debts are accordingly growing by the amount of interest unpaid. The British Government proposed to tho American Government thnt all inter- j national debts arising out of the war should be cancelled, as a means of cementing the good relations that exist j between the Allies, and also of reviving I international trade. Hut the proposal was not acceptable to the. United .States. ■ Cancellation would mean transforming the total debt from an external one to : an internal one. and placing on the ! shoulders of the American taxpayers the ; I burden of paying interest to the Ameri- ! can investors who provided, through J their Government, ihe means of financing | the Allies' purchases of war stores and | foodstuffs in America. Nevertheless there are some American financiers who I contend that from the national point of ! view it would be a sound business trans- ' action to cancel these debts. The posiI tion of the United States as a creditor I country is that she cannot accept payI ment i" goods of the debts owing to her, j without endangering the progress and prosperity of her own industries. A ' llood of imported European goods in pay. j ment of these debts would not only spoil i the home market of American industries, hut would also affect the export market; for while European countries are paying j off these debts to America, they would ! not buy American goods, for that would 1 be equivalent to running up another debt to America. On the other hand, tiie debtor countries, with Uui exception of Great Britain, see no prospect of paving their debts to America.