The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. MONDAY, DECEMBER 28, 1931. DEBTS AND REPARATIONS.

Auckland Star, Volume LXII, Issue 306, 28 December 1931, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

MONDAY, DECEMBER 28, 1931. DEBTS AND REPARATIONS.

For the cause that lacks assistance* For the wrong that needs resistanct, ill* fuitjr*. <•* tk.3 dist-SiiC*, And the good that we ran da.

With commendable promptness the Advisory Committee -which has been meeting at Basic this month to consider international settlements has issued its report, and the impression produced by perusing it is that the Young Pian is now condemned to radical modification-, if not to final suspension. The report insists that Germany be able to resume payment of the "conditional" annuities after the one year of respite allotted by the Hoover Moratorium has expired. But it further declares that "Germany's problem is a world problem," and that what is required now to restore confidence and prosperity is "the adaptation of reparations and war debts to meet the needs of the world's upheaval."

Of course, the Basle Committee was appointed only to analyse and define the present financial situation, and not to recommend methods of dealing with it. The French and Belgian delegates were therefore quite justified iii their refusal to commit themselves to specific proposals. Apparently the French members of the Committee maintained that Germany could and should continue to pay reparations, and the Germans insisted that their country cannot and will not submit to this financial servitude any longer. It must be admitted that the Germans have certain strong arguments on their side. For, as the Committee's report points out, the Young Plan was based on the assumption that the world's trade would constantly expand; but the collapse of international trade and the fall of various currencies in relation to gold have disappointed these expectations and made the continuance of reparation payments virtually impossible.

Against this, France urges with much force that the Germans, since the war, have put hundreds of millions into public works and national defence, and the construction and projection of very expensive battleships in particular is positive proof that Germany, if she cares to do so, can meet her obligations. Manifestly, these questions and the policy rising out of them demand immediate discussion between the nations chiefly concerned. Mr.. Mac Donald, after reading the report, suggested that the Governments ought to meet "without a day's unnecessary delay." Accordingly, France and Britain are to hold a conference on January 18, and have invited the other governments interested to send delegates to The Hague to participate. This is a step in the right direction, but the refusal of the United States to take part in the proceedings may render the conference futile. Apparently Washington still holds that "the question of reparations is entirely a European problem"; which means that only when the European Powers have settled their dispute about reparations will the United States be prepared to consider the readjustment of debts. Even when that difficulty has been got oyer, American public opinion will no doubt support Mr. Borah in his contention that, unless Europe cuts down its expenditure on armies and navies, it has no right to expect any deductions from the debt bill. But if,, on these grounds, America holds aloof from the conference, the difficulties of the European Powers are still a long way from settlement.