GENEROUS TERMS.

Press, Volume LXII, Issue 18603, 30 January 1926, Page 15

GENEROUS TERMS.

ITALY'S DEBT AGREEMENT. NEWSPAPER OPINION. (SY CABtE—rSESS ASSOCIATION—(.VCSTP.AIJAS AND K.I. CABLE ASSOCIATION 1 .) LONDON, January "2s. Tho newspapers emphasise the sacrifice made by Great Britain under iho Italian debt settlement. It is believed that France will be tho nest to seek a settlement. M. Poumer (French Finance Miniser) intends to como to London as soon as the financial debate in tho Chamber of Deputies is ended. Tho "Daily Express" explains t hnt under tho settlement. Italy, in M annuities, pays Great Britain £012,200,000, in capital and interest, in respect of a debt of £000,,000,C00. This is equivalent to Great Britain foregoing £'78,000.000, together with all interest on the remainder. The British Treasury had estimated that Italy was capable of paying £5,000,000 to £9,000,000 yearly. Italy's gross debt at 5 por cent, represents 7d in tho pound of Britain's income-tax. Under tho settlement Italy will reduco this burden by a halfpenny in tho pound in 1926 and a penny in the pound nt tho period of her highest payments. In other words, says tho "Express," the British taxpayer will continue to pay Cd in consequenwof tho dobt and iho Italian taxpayer one penny. In tho meantime, Italy has undertaken to pay tho United States £481.000,000 in respect of a debt, of £420,000,000. Great Britain is paying America £30,0Q0,C00 yearly. If Great Britain receives £4,500,000 from Italy, £12,500,000 from Franco, and £10,000,000 under tho Dawes scheme, she will still bo £8,000,000 annually to the bad.

The diplomatic correspondent of the "Daily Telegraph" says that tho justification for tho terms made with Italy lies in tho fact that Italy receives so small a quota from the German reparations, also in Italy's frequent hearty support of Great Britain's European policy. The "Daily Chronicle" describes th© settlement' as "fleecing Jolm Ball." Tho "Morning Post" says that it marks another step in tho unification of Europe. It is too late now to repino that a policy of general debt-cancella-tion was n6t carried into effect, though it must always be a matter for regret.

What Britain Gains. "The Times" says that since cancel-1 lation is not possible, tho British policy has been to cancel all except aiij amount equal to the sum paid to America. In practice, however, we cannot obtain •more than debtors are able to remit without strain. Otherwise what we might gain in repayment we should loso in trade, owing to tho diversion of moneys from current purchases to the redemption of old purchases. 'The "Financial Times" says that Mr Churchill wanted some relief from the burden of payment to America, and accppted the first reasonable figure suggested, the Treasury taking tho view that a bird in tho hand is worth two in the bush. The "Daily Herald" declares: "Once more British Ministers have been taken iu by a foreign "sob story.' Tho interests of a heavily-taxed people have been sacrificed for a visionary political advantage." Great Cordiality. An atmosphere of great .cordiality marked the conclusion of tho negotiations. Tho total 'debt to Great Britain was £611,000,000, against which Count Volpi claimed a refund of £22,000,000, gold deposited in London during the war.

Mr Churchill, at the ceremony of signing the agreement, declared that Cabinet allowed him wide latitude iJi order to give consideration to AngloItalian friendship. Mr Churchill, in the course of an interview, said that Great Britain, up to the. present, had paid £IOO,OOO,UG. in debts, and had received £20,000,000 from 'reparations. So far, nothing had come from war debts. [ltaly is entitled to 10 per cent, of the reparation payments, Britain to 22 per cent., and France to 22 per cent. Italy recently concluded an agreement with the United States providing for the full repayment of tho principal of 1,600,000,000 dollars (£320,000,000), with accrued interest totalling 500,000,000 dollars (£100,000,000). For the first five years 5,000,000 dollars a year will be paid off the principal, but no interest will bo paid during that poriod. Tho annual repayments thereafter will be on a sliding scale, reaching a final payment of 80,000,000 dollars (£10,000,000) in the 02nd year.]