TRACTS FOR THE TIMES.

Auckland Star, Volume LXIII, Issue 209, 3 September 1932, Page 8

TRACTS FOR THE TIMES.

WAR DEBT CANCELLATION. (By PRO BONO PUBLICO.) What are the prospects of a cancellation of war debts? I suppose that nothing that could be done in the world to-day would go further towards ending the depression than a complete wiping out of the debts. It looks, as if debts and reparations were going to be cleaned off the slate in Europe, but there is no real indication that the Americans ai'e in any mood to fo/low this example. I wonder if it has occurred to the "heads" in Europe to put the case for cancellation to America a.s a purely business proposition. The last time 1 was in town I heard of a business deal that set me thinking pretty hard about war debts. It was rather an ordinary transaction, I suppose, just a case in which a firm accepted about thirty per cent in full settlement of a debt and thereby enabled the debtor to continue in business. The creditor firm took the view that it* customer was a steady sort and a good payer as a rule, and that it would be better to keep him as a customer than to close him down. The European debtors, it seems to mo, could put their case to America in the same way. What would it cost the United States to wipe the debts oil the slate altogether? Not a great deal, if you take the long view. American publicists usually meet the cancellation suggestion by saying that the debts are owing not to the American nation but to private investors and that the investors cannot be expected to cancel capital and interest. But while private investors have obvious rights, .there is another way of looking at the matter. For every 100 men who bought war loan scrip there are probably 1000 or may be 10,000 who didn't and who are having , a thin time because of the state of trade. If cancellation of debts would help to bring back trade to the 10,000 would it not be sound national policy? I would like to see the figures worked out roughly. The (Jovernment, of course, would have to take over the debts, adding the amount of two thousand million pounds or no to the national debt, and including the interest in the annual Budget. It wouldn't make much difference to the taxes, and anyway if trade came back to ni>rin_l the Americans would be able to pay the extra taxation without much trouble. Of course the Americans may decide on their own accord to wipe off the European debts, but they would come to that decision more quickly if they could be shown that cancellation was a good business proposition. And is one thing already pretty certain—moat of the smaller countries that owe money to America a-re going •to extend the moratorium on their own account, perhaps indefinitely.