The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. MONDAY, DECEMBER 5, 1932. THE AMERICAN ATTITUDE.

Auckland Star, Volume LXIII, Issue 288, 5 December 1932, Page 6

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

MONDAY, DECEMBER 5, 1932. THE AMERICAN ATTITUDE.

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

The Vicc-President elect of the United States, a gentleman from Texas, confesses that he has been "too busy with beer" to read the latest British Note on war debts, but this has not prevented him from exjH'essing , an emphatic opinion on the subject. This shows how tragic it is that the question of war debts should have to be decided by America at the present time. Mr. Btoovcr is due to vacate office in three months, and Mr. Roosevelt is not yet in power. There is the fatal divorce between the executive and the legislative authority, which makes for timidity of action at the very time when some bold grappling , with the matter is essential both in the interests of the debtor countries and in the interest of America herself. The reasoned statements made in the British Note have to be considered more from the political than the economic standpoint, and statesmen have to weigh the attitude of the Middle West as expounded by spokesmen little accustomed to take a wide view of international questions. Publicists -who went to the Naval Conference in Washington ten years ago were struck by the sensitiveness of the American Government to public opinion. In the United States is the largest democracy in the world, and it has just elected an ill-informed Parliament*

It is made evident by the Note that continuance of the present agreements regard ing , war debt payments would not only harass the debtor nations, but would deal a serious economic blow to America. Since the funding agreement was made between Britain and America the trade between the two countries has fallen from about £300,000,000 to £100,000,000. A further fall must follow any continuance of payments on the present scale. This is an obvious economic fact, and the cogency of it is admitted by the more responsible newspapers of the United States j irrespective of party leanings. But as the "San Francisco Chronicle" says, "Congress has made up its mind and its answer is 'No.' Most American economists agree that the British analysis is correct, but no American Congressman will learn that by mere economic argument." It is said that many of the members of Congress do believe in private that debt payments cannot be resumed by the European debtors without grave economic consequences to America as well as to themselves, but they are not willing to bring home this unpalatable truth to their constituencies. The only hope for revision lies in a change of public opinion in the United States, and this change can only take place when the British Note has been thoroughly studied and the position has been made clear to the least instructed voter that the financial interests of America are intimately bound up with the financial interests of the whole world.

Apart from the money advanced for war purposes, America has investments abroad that almost equal the amount of these debts. The security of these investments depends on the prosperity of the countries where the money is invested, and this prosperity is imperilled by the continuance of the present war debt payments. Unless there is a readjustment of war debt obligations, the Lausanne agreement cannot be ratified. The debtor countries will have to demand payment by Germany of her obligations under the Young Plan, and the United Kingdom ■will have to demand payment from her debtors. American investments in Germany will thus be prejudiced and the economic recovery of Europe will be seriously retarded. This cannot fail to have a seriously adverse effect on American trade as well as on investments, and thus, as the Note points out, the interests of both Britain and America are to some extent the same. Resumption of payments means a definite loss to the United States producer, and it is this fact that has to be brought home to the citizen from Missouri as it has already been brought home to most economists.