THE WAR DEBTS ISSUE REVIVED

Press, Volume LXXIV, Issue 22464, 27 July 1938, Page 17

THE WAR DEBTS ISSUE REVIVED

TO THE EDITOR OF THE PRESS, Sir, —Your leading article on the war debts issue in Monday’s paper states the position fairly so far as it goes; but there is one solution which is'never ciscussed, and that is cancellation. While the debts remain in suspense. like a certain famous coffin, they are an obstacle to more debts, internationally. Both creditor and debtor nations seem to have no difficulty in borrowing further huge sums internally, which have no existence till the obliging bankers manipulate the figures in their ledgers. Now that the American armament makers want to be in on the lucrative business offering in Europe, the orthodox proceanro cf international borrowing is held up by these inconvenient unpaid debt* . - .• • ■ ; -

Cancellation is the only solution, but it is amusing to see how both sides balk at even the mention of it. The reason is obvious if a moment’s thought is given to it. If the United States Government offered to cancel (he debts, the storm of protest from those of their nationals who think vhat the money represents the savings of the people would involve the Government in an explanation of where the money really comes from. Such an explanation is out of the question for the obvious reaction would be a demand to know why the £250.000.000,000 of internal debt could not also bs cancelled if the process i$ so easy. For the same reasons, England cannot suggest that her creditor do the sensible thing by cancelling the debt. Irresponsible, little nations like Chile, Brazil, and company may repudiate and virtually achieve the same result as cancellation; but the high and mighty must find a way round the impasse, in order to borrow more and more! It savours of comic opera only that we take ourselves so seriously.—Yours, etc., W. B. BRAY. July 26, 193S