Bay of Plenty Times. THURSDAY, JUNE 8th., 1933. THE WAR DEBTS.

Bay of Plenty Times, Volume LX, Issue 11134, 8 June 1933, Page 2

Bay of Plenty Times. THURSDAY, JUNE Bth., 1933. THE WAR DEBTS.

The problem of war debts will be hotly discussed during the next two weeks as we anticipated would be the case. It is reported from Washington that President Roosevelt will use his treaty-making powers to effect a war debt settlement with Britain and France with a view to a permanent reduction of their debts, and probably the suspension of the payments on June 15. It will be remembered that when the last half yearly payment was due France deliberately defaulted. The then Premier, M. Herriot, suggested payment, but the Chamber of Deputies refused to fall in with his views, and the Herriot Government had no option but to resign. ' Britain, it will be remembered, paid up, and paid in gold, the amount being £111.500,000, and France offered help in this. Britain paid with a condition attached that the amount must be regarded as a capital payment to be taken into account in any future settlement. Now it is reported that the British Cabinet is split on the matter of payment on June 15. The Chancellor of the Exchequer and the President of the Board of Trade, are opposed to payment, while other members hold that Britain must pay and honour the contract whatever the consequences. Apparently the decision is to be left to the House of Commons, and if that is really the case the decision will be in favour of payment, in accordance with British ideals. At the same time it would be no reflection, nor would it be humiliating, if the House of Commons decided against payment. The French Chamber of Deputies has set up a precedent in the matter, and French credit and honour have not been impugned. The United States, by going off gold, has broken faith with her creditors, for she is now paying’ in depreciated paper currency.

From the latest available facts it io apparent that the payment due on June 15 will be postponed, and furthermore that the debt will bo scaled down. The United States must consent to this, not from any altruistic motives, but to conserve her own interests. If she fails to see what is due to herself and the rest of the world, the nations must ostracise her. But America will toe the mark, and we venture to predict that before June 15 arrives the war debt problem will be practically solved, at all events none of the debtor nations will be asked to pay. A temporary moratorium pending settlement is likely to eventuate.