The Auckland Star WITH WHICH ARE INCORPORATED The Evening News, Morning News The Echo and The Sun. THURSDAY, JUNE 14, 1934. PAYING WAR DEBTS.

Auckland Star, Volume LXV, Issue 139, 14 June 1934, Page 6

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

THURSDAY, JUNE 14, 1934. PAYING WAR DEBTS.

Wor the cause that lacks assistance. For the wrong that needs resistan&l For the future in the distance, And. the good thai «se can do

One result of the British Note on Avar debts is the suggestion that the United States is willing to entertain proposals for payment in goods and services. This is the first time that America has signified her -willingness to take payment in the only, way in which payment can be made. Previously she has insisted on gold. This is impossible, because there is not enough gold with which to make the payments. America previously refused to take payment in goods and services because she wanted to sell to debtor countries and to take payment in specie both for her goods and for war debts said to be due. To obtain payment in goods and services America will have to alter her tariffs 'and subsidies. The President has signed the new Tariff Bill under which he is empowered to fix rates on all articles imported into the United States, and to negotiate reciprocal trade agreements with other nations. Britain has never repudiated her debt. She has merely pointed out the impossibility of paying in gold, and suggested negotiating on the whole position. No money was lent by the United States when these debts were incurred. Credits were created for goods supplied by America. The money was spent in America on American supplies. These goods were consumed in the war, and there were no tangible assets to produce interest. It is therefore only reasonable that repayment should be made in goods, and this is the only form of payment that avoids transfer difficulties and the consequent damaging effects on world trade. America still persists in maintaining that there is no connection whatever, from the United States Government's standpoint, between the debt owed by Britain to the States and those owed to Britain by her war allies. There is', however, a.very real connection from Britain's standpoint. Britain cannot pay the United States unless she receives what is owing to her from her. former allies, and this in turn involves the payment by Germany of the reparations which were provisionally cancelled a<; Lausanne. Insistence on these payments would mean a dislocation of trade that would bo disastrous to all the countries concerned. The problem of war debts is one that has to bo approached from a wide standpoint, and it can best be considered by negotiations that take account of the interests of creditor and debtor nations alike. •-"