The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. THURSDAY, MAY 26, 1932. BRITAIN'S DEBT PROBLEMS.

Auckland Star, Volume LXIII, Issue 123, 26 May 1932, Page 6

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

THURSDAY, MAY 26, 1932. BRITAIN'S DEBT PROBLEMS.

For the cause that lacks assistance, For the torong that needs resistance, For the future in the distance, And the good that we can do.

It is reported that Britain is arranging to ay to America, besides the formal annuities, further annual sum to make up for the ayments suspended under tho Hoover loratorium. The Basle report has made it bundantly clear that Germany, at any rate for ie present, is unable to continue reparation ayments, but if Britain has to pay America. 10 must either pay entirely out of her own nances or collect the sums due to her from 'ranee, Italy and the other allies. If she as to collect these sums, France and Italy ■ill probably have in turn to insist on some erman reparation payments. This might lean the financial collapse of Germany. The total indebtedness of Great Britain to he United States is over .€931,000,000. Great iritain is owed by France, Italy and other Hies £ 1,120,000,000. Therefore she would ppear to have a favourable balance of ayments, but the payments due to Britain are argcly dependent on what Germany can do. n the past year Britain has given a lead to the ,'orld in the splendid effort she has been naking to meet her obligations, and it appears hat she is determined to continue her efforts :ven at a tremendous sacrifice. It is stated hafc further huge economies totalling £50,000,000 are planned, and an emergency Judget is to be brought down. Recent events lave suggested that Britain was rising above ier troubles, but the latest cables give renewed loree to the warnings uttered from several [uarters that the nations must act together in heir endeavour to restore a better condition )f affairs in the world. Economies in Britain vill have a still further depressing effect upon he level of prices, and tho aim of national policy, it has been fully realised, should be to nit an end to the disastrous downward trend. Vlarkets have been contracted, and the unsatisfactory economic condition of all the leading ;ountries at the present time is inextricably jound up with the question of war debts. The >reat creditor nation is the United States, and Britain's aim is merely to collect enough from her debtors to pay what she owes to the United States. Several years ago Great Britain remitted a substantial amount of the debt due to her from France, and made a still greater concession in Italy. So far no steps have been taken to reduce the debts due by the Dominions to Great Britain. These debts total over £110,000,000, of which New Zealand's share is £24,000,000. Under the present funding arrangement New Zealand is to wipe out her debt by 1959. Sir Edward Grigg has suggested that Britain might be generous to her own family as well as to foreign countries. Great Britain showed generosity last year in extending the benefits of the Hoover moratorium to the war debts due from the Dominions, and New Zealand was glad of the concession. It seems reasonable to believe that, if there were a substantial all-round reduction in war debts, New Zealand would benefit with the rest of the Empire. There are strong arguments in favour of a scaling down of reparations and war debts. With the fall in prices the burdens have grown to an intolerable extent, and the halving of the price of primary products has meant the doubling of the weight of the debt on New Zealand and other agricultural anc pastoral countries. But shifting a debt from one nation's shoulder to another's may be no remedy. "It should be borne in mind," says the Basle report, "that the release of a debtor country from a burden of payments which it is unable to bear may merely have the effect of transferring that burden to a creditor country which, in its character as a debtor, it, in its turn, may be unable to bear." The adjustment of all inter-governmental debts is a necessary step" in re-establishing confidence and reviving economic stability throughout the world, and even then it is very difficult to say how the placing of the ultimate burden on one country, the United States, can be avoided.

PENNY POSTAGE AGAIN.

The reduction of letter postage to a penny again will be welcomed by everybody, individuals and firms, and perhaps will cause more satisfaction than would be derived from a larger concession in another field. There is something especially personal and intimate about postage, and a citizen may feel less aggrieved about a single direct sword-stroke like income tax than about the daily nagging imposition of an extra halfpenny or penny on his letters. The higher communication rates imposed last year were intended to produce another £900,000 in revenue. It is not clear what they have produced, but it is known that they caused a great deal of dissatisfaction and that there was a falling-off in business. Many firms employed messengers to deliver letters, and through this and the general practice of economy some of its business may prove to be permanently lost to the Department. The Government is to be congratulated on its decision to bring charges back to the old level. This is in keeping with the general movement to reduce costs. It has been an anomaly that the State should have at the same time increased its taxation and either raised or not reduced its charges for services. This postal reduction means a fall in the cost of a universally used utility. The average family will benefit to the extent of several shillings in the course of a year, and the saving to business houses will be substantial. It had been hoped that all charges for telephones would be reduced, but while the Government is doing something for country subscribers, it has decided against reduction in the towns. It will be interesting to see how many town subscribers are lost this year, but in the meantime townspeople should admit that, the fanner's need of telephones being the greater, he should have the first consideration in the allocation of concessions.