NEWFOUNDLAND REFORMS

Press, Volume LXIX, Issue 21034, 9 December 1933, Page 15

NEWFOUNDLAND REFORMS

BRITISH PLAN EXPLAINED

ASSUMPTION OF FINANCIAL RESPONSIBILITY (BRITISH OFFICIAL WIRELESS.) (Received December 8, 5.5 p.m.) RUGBY, December 7. Mr Neville Chamberlain, Chancellor of the Exchequer, to-day moved a resolution in the House of Commons on which a bill will be founded to carry out the recommendations of the Royal Commission that investigated Newfoundland's affairs. The present public debt of Newfoundland amounted to £17,500,000 plus 9,000,000 Canadian dollars, a total of about £ 19,000,000 at the present rate of exchange, said Mr Chamberlain. On this, yearly interest was about £1,000,000, representing 65 per cent, of Newfoundland's total revenue. The British Government had no hesitation in going to the aid of Newfoundland. Ke proposed that the bulk of the creditors would not be paid in cash, but would receive stock of equal face value backed by the Government of the United Kingdom, with interest at 3 per cent., which, the Government was advised, would produce a par value equivalent to the initial value. The effect of the proposals was that the annual interest burden would be reduced by £350,000 a year, and the debt would amount to £2,000,000 of trust securities and about £17,000,000 of new stock. The new stock would carry a sinking fund of 1 per cent., which would not start for five years, since the burden of that sinking fund would be an additional £ 170,000 a year; but they might hops that before that began the financial conditions of Newfoundland would be so much improved that the burden would not prove to bo excessive. They must assume that it would be necessary for some years for Great Britain to come to the assistance of Newfoundland and make up the deficiency in her budget. The British Government proposed that whatever advances were necessary should, up to the end of 1936, be gifts from Great Britain, and that afterward they might be by loan or gift, as decided later. He estimated that including the £550,000 which Great Britain had already found during the last 12 months, and which was a gift, Great Britain's total liability by the end of 1936 would amount to from £ 1.500.000 to £2,000,000. Mr W. Lunn declared that Labour was opposed to the resolution. Labour did not object to assisting people who were prepared to help themselves, but objected to the British taxpayer being called on to make good a bankruptcy due to wrongdoing. Mr L. Hore-Belisha (Financial Secretary to the Treasury) replying, emphasised that huge reductions in salaries, education, and pensions had been accepted by the Newfoundland DeopJo in their endeavours to right the situation. These would result in intense hardship and privation. The Government had had no option but to accept the proposal. The re cr ''ution was carried by 227 votes to 38.