WAR DEBT TALKS.

Auckland Star, Volume LXIV, Issue 82, 7 April 1933, Page 7

WAR DEBT TALKS.

AMERICA'S CONDITIONCOMPENSATION FOR REVISION. POSSIBLE BILATERAL TABXFF. (By VISCOUNT SNOWDEN.)' LONDON, March I. The success of the forthcoming conversations on war debts and world economic problems between the United States and the British Governments will depend in a large measure upon both parties entering the conference free from commitments made by statesmen beforehand in public speeches. It is vitally necessary that nothing of a provocative nature should be eaid by responsible persons which is calculated to arouse indignation.

From this point of view certain statements by the British Chancellor of the Exchequer are regrettable. They convey the impression that Great Britain as the debtor denies to the creditor the right to ask from the debtor some compensation for the remission of the debt. He deprecated the idea of the coming debt negotiations being a great swopping deal.

Plain speaking is very necessary in actual negotiations, but it in premature for probable delegates to a. conference to indulge in that in the public Press before negotiations have begun. The British case for the cancellation of war debts has been duly stated in Notes addressed to the United States Government. The British Government maintains that these debts are one of the mam causes of world trade depression, and are as harmful to the creditor aa to the debtor nations.

Mutual Agreements Aspect. In my opinion the attitude of the British Government on the question is sound. But from all information one can gather American opinion in the mam does not accept that view. America coneiders that the cancellation of the debts would ho wholly a sacrifice on her part for the benefit of the debtor countries. Unless that opinion is taken into consideration, and allowance made for America's serious financial and trade conditions, no settlement of the debt question can he reached. America's condition for the revision of the debts, that she should be given some compensation for the sacrifice of her claims, is not unreasonable, and it should be possible for Great Britain to agree to this. Mr. Chamberlain's words on this point were badly chosen, and boro a construction he probably never intended. He did not, in fact, rule out thf consideration of mutual agreements. ■on trade and monetary matters, whicli would put America in a better position in the British market than she occupies to-day. But any agreement which would give that result would not have to be of a wholly one-sided character. Ido not believe that the British Government would agree to an arrangement under which American exports were given favourable terms in the British market while America maintained her present prohibitive duties upon British goods. A mutual agreement between the United States and Britain for greater freedom of trade between the two countries would give the compensation for debt concessions which the United States seeks.

Benefit to Both Countries. An agreement by which an increase of trade between the United States and Britain was secured would be a greater benefit to both countries than an isolated settlement of debts. If, for instance, the disadvantages to United States trade with Britain which have been inflicted by the Ottawa agreements could be removed, that alone would be a substantial compensation to America for the sacrifice of her debt claims.

To make a bilateral tariff agreement with the United States would be in harmony with the claims which the British statesmen arc shouting from tha housetops. They justify the adoption of tariffs by Great Britain solely on the ground that they give her a bargaining weapon to secure the reduction of tariffs in other countries. The British Government is pledged to reduce her general tariff if thereby she can gain concessions elsewhere. In what precise form the compensation t.o America should be given must be decided by the Washington Conference. But if there is a willingness on the part of the British to understand the American point of view, that she will be making a great and to her an expensive sacrifice by remitting her debt claims, it should not be difficult to meet the American desire for compensation in a way which will be of benefit to her, and which will not deprive Britain of the relief which would otherwise come to her from the remission of the debt payments. There will be no need for Britain to recede from the position she has taken on the debts, namely, that cancellation would in itself be a great indirect advantage to America by lemoving a main hindrance to world trade restoration.

A Lead to the World. The contention that any agreement with the United States for greater freedom of trade between the twa> countries must await'the World Economic Conference is without substance. The willingness of the British Government to conclude trade agreements with the foreign countries now seeking such agreements disposes of the argument that an agreement with the United States cannot be made part of the debt settlement. Indeed, such an agreement made between the two greatest trading nations before the World Conference meets would have considerable influence upon that conference in the direction of removing or reducing artificial hindrances to world trade.

The invitation to the Washington Conference proposes that the discussions should be wide enough to cover all the economic causes of the -world depression. It is true that all the remedies for the restoration of world prosperity cannot be settled by a bilateral agreement between the United States and Great Britain. But a discussion upon them at Washington, leading to an agreement in policy between the two countries for the World Economic Conference would gc» far to ensure a successful outcome of that conference. Two questions the Washington Conference can settle—the debts question and the granting to the United States of compensation in the form of £ reer access to British markets on the basis of fair competitive conditions. I think I can speak for the people of England in saying that they realise the position oi America m the debt controversy. They are anxions only for a friendly settlement which will be mutually beneficial and which will lea%e no feelings of disaffection on either aide. (N.A.N.A.)