The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. WEDNESDAY, MAY 30, 1934. AN UNWANTED CORPSE.

Auckland Star, Volume LXV, Issue 126, 30 May 1934, Page 6

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

WEDNESDAY, MAY 30, 1934. AN UNWANTED CORPSE.

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

There is a classical story about a ruffian who was in the habit of flinging- his victims over a cliff into the sea. When, in order to giro him liis deserts, Theseus tossed him off the same place, the sea would not pollute itself by receiving the body; neither would the earth, having once got rid of him, consent to take him back; so ho hung in the air. Are the war debts destined for the same fate? They have been declared dead in Europe, yet America will not receive the corpse, and they hang in suspense over the world. The debtors on one side of the Atlantic have declared them unpayable, yet the creditor on the other side demands that they shall be paid. These debts were contracted by shipments of goods from the United States to Europe for the purposes of war; those goods —armaments, food and equipment for the armies of the Allies—were consumed or blown to atoms in the struggle on the Western Front. The utmost that Europe could do would be to repay them in the way they were received —by shipments of goods —but America slams and bolts her door against more goods from Europe. She demands money, which means gold; yet the whole of the gold in Europe would not pay half the sum that is claimed.

Britain has presented tho case against payment in convincing arguments, but the politicians of America will not be convinced. They are" considering their constituents, whoso ignorance about debts in some of the States is deplorable. Tho latest indication of American blindness to the true facts of the case was seen in April, when a surplus was announced in Britain's national balance-sheet. Immediately the resistance to any concessions stiffened across tho Atlantic. Americans jumped to the conclusion that Britain had the money to pay the war debts, but that she was not willing. Here, so they reasoned, was an instance of the unwilling debtor. Yet the difficulties in the way of payment were exactly as they had been before. There was no means to transfer the money, except by the shipment of gold, and only a few weeks before America had been drawing gold in huge quantities from Europe, which had weakened the paying capacity of the debtor countries.

An. American "who understands the war debts situation has said that the cost of the depression for three months was equal to the aggregate of the debts. It is doubtful whether America, on balance, has collected more than a trifling sum from Europe. While the payments seemed to be made without difficulty in the more prosperous years before 1929, America was lending large sums annually to Germany and others. The flow of money to Europe made possible. the flow from Europe to America. When America stopped lending, both flows stopped; it was inevitable. Can they be started again? The experience Americans have had with their foreign debts makes it unlikely that they will lend on the former scale for a long time, and the balance of payments must depend upon the state of trade, which makes it clear from another angle that America must either open her markets to the goods of foreign countries, buying more than she sells, or wipe the slate of war debts.