PAYMENT OF WAR DEBTS

Dominion, Volume 16, Issue 119, 5 February 1923, Page 7

PAYMENT OF WAR DEBTS

COMPLETE AGREEMENT GRADUATED INSTALMENTS FOR 62 YEARS A HUGE BOND ISSUE Details of the agreement for repayment of tho British war debt to the United States of America have been made public. Payment is to be by annual graduated instalments for sixty-two years. BY telegraph—press association. —COPYRIGHT. (Rec. February 4, 5.5 p.m.) Washington, February 2. Tho Treasury Department has issued a statement giving details of the debt funding agreement. This shows that payment of tho principal is to bo made by annual graduated instalments ranging from twenty-three million dollars for tho current year to 175 million dollars in the sixty-second year, when the total sum will be repaid. Interest will bo at 3 per cent, for ten years, and 3] per cent, for the succeeding period, calculated on the unpaid balance. b . The local principal indebtedness is placed at four billion, six hundred million dollars, for which British Government bonds will be issued to the United States at par. Britain has the option of repaying the principal in threeyear periods. The principal of the notes to be refunded is 4,074,818,358 dollars. Interest accrued and unpaid to December 15, 1922, at the rate of 4J per cent, is 629,830,106 dollars. The total is apnroximatelv 4,704,054,465 dollars. From this'is to be deducted payments made in October and November last with 41 per cent, interest to a total ot 100,526.379 dollars, leaving a balance of 4,604,128.035 dollars,. of which 4,128,085 dollars is payable in. cash. The principal of tho bond issue of four billion six hundred million dollars is payable bv annual instalments on a fixed schedule subject to the right of the British Government to make payments in three-year periods and tn pav off additional amounts of princip .t on’any interest date upon mnetv‘davs notice. For the first five vears onehalf interest mav be deferred and add ed to the principal, bonds being issued similar to those of the original issue. Anv payments of interest and nrincipal may be made in anv Umtecl States Government bonds issued since April 6. 1917. such bonds to be taken at par and accrued interest. It is stated that President. Harding opposes a rider to the debt settlement providing that the money b» .used to pav the soldiers’ bonus, bohevme that, the debt legislation should stand on its' own merits. The President does net object to an amendment Democrats representation op the Debt Commission. —Aus.-N.Z. Cable Assn.

COMPLETE AGREEMENT Washington, February 2. 'Hie American Commission has reached a complete agreement with the British Ambassador (Sir Auckland Geddes) regarding the debt-funding plan.—Aus.N.Z. Cable Assn. CONGRESS OPPOSITION GROWS WEAKER TERMS MEET POPULAR APPROVAL ' (Rec. February 4, 11.5 p.m.) New York, February 3. According to the “New York limes” Washington correspondent opposition to the Administration’s plan for funding the British • debt appears to be weakening in both branches of Confress, ana a prediction was made toay that the necessary law would be passed during the present session before the adjournment on .March 4. The American Commission held a session lasting several hours. It was preparing a report containing recommendations concerning the form legislation should take, and it is expected that President Harding will send a message to Congress early next week. The Administration is gratified that the terms appear to meet with popular approval and are favoured by a great number of Senators. Both parties have expressed their readiness to pass the necessary debt law. A feature of the funding, which provides that Britain can use American bonds to pay her debt, has been considerably commented upon. It is pointed out that Britain could buy 'bonds selling below par, thus benefiting and at the same time, such purchases would bring up the prices of these bonds, so benefiting American holders—Aus.-N.Z. Cable Assn. STERLING EXCHANGE STRONG (Rec. February 4, 11.5 p.m.) New York, February 3. The sterling exchange closed strong at the week-end. —Aus.-N.Z. Cable Assn. ■ ' FRENCH CONCERN ■ e Paris, February 2. The “Journal” says: “The AngloAmerican agreement provides that no debtor of the United States shall receive more favourable treatment than Britain.” “The Journal” hopes that rumour interprets the clause inaccurately, otherwise it settles the'fate of the ’French debt. —Aus.-N.Z. Cable Assn. ’ I A SACRED TRUST BRITAIN’S RESOLVE TO PAY MR. LLOYD GEORGE’S VIEWS rihe following and all Lloyd George articles copyright by United Press of America in all countries, copyright in Australasia by Australian Press, copyright in Britain by "Daily Chronicle" Reproduction in full or in part prohibited.! London, February 1. In an article on “War Debts,” Mr. Lloyd Gcorgo says : — “As a discussion of Britain’s debt to America at the present stage can only embarrass negotiators, I express no opinion as to the merits of the proposals or counter-proposals submitted at Washington, but have no doubt that agreement will bo reached. It is eminently desirable that arrangement should bo effected. The .American Government has displayed a spirit of accommodation and concession which is highly gratifying to those anxious to

maintain tho spirit of friendship and confidence between the two greatest free communities on earth. The British Government has also made a genuine effort to arrive at an arrangement in its decision to take all necessary steps to repay the debt. The Moral Obligation. “We could have paid for all supplies required for our own use without resort to a loan from America. Nevertheless, the money was advanced on our credit and signature. Our credit as a nation, therefore, demands that we should pay. Whether wo can collect enough from our own debtors to meet this charge becomes increasingly doubtful as it is becoming more increasingly needful. Britain is alone in thinking that 'she is under any moral obligation to pay her external liabilities incurred for effective prosecution of war.

“Why have the British taken a different view from that adopted by the other Allies? I have no desire to offer censure or criticism upon their decision. They have, no doubt, reasons for the course which they are adopting. A man hates reminding his friends at the end of a business, in which both have been engaged in warm amity, that there is a little balance to ho paid up. He has been expecting his friend to mention the matter to him, but the friend disappoints his expectations, and not a hint comes from that quarter of any realisation that there is anything due. The friend is most insistent on collecting business accounts due to himself. He is angry ,at delays in the payment of his own bills, but his conscience is blind on the side of the debts which he himself owes. It is not an uncommon experience, and we are suffering through it to-day. Huge Debt Left by War. “The war left us a creditor nation to the extent of two thousand millions, and a debtor nation for half that amount. We readily accepted an invitation from our creditor to discuss repayment, wdiile our debtors have displayed invincible reluctance to enter into a similar discussion with us. Tliat ought not to influence our action. Britain is the greatest of all internartional traders. Her credit rests on the reputation she has well earned. Her bond is a sacred trust, which her people always honour and redeem without counting the cost in toil and treasure. As soon as the war was over the people of Britain, with an instinctive impulse,■■ set about restoring their war-battered . credit. Government, bankers. merchants, manufacturers, and workers were of one mind: Borrowing must end : Britain must pay her way, whatever the sacrifices. Expenditure was cut down and heavy taxation imposed—taxation such as no other country bears. Will Pay Without Murmur. “Britain means to pay the last of her debts without a murmur. Already we are reaping some of the reward. The purchasing value of our currency has risen and the cost of living fallen steadily, while other countries which pursued a different policy find the cost of living ascending, month by montUi. A short time ago we were taunted in the French Chamber by the President of the Council that our unsound financial policy was responsible for unemployment. It is true that, had we defied our foreign creditors, instead of payiim- them, we might have fostered an’ artificial prosperity, but British credit would have disappeared beyond recovery. . , “I hazard no opinion as to the percentage at which the terms of repayment to America will ultimately be fixed, but whatever the figure, the burden will be infinitely less than that indirect burden involved in large purchases with a discredited currency. Why tho debt was incurred, the circumstances under which it was entered into, and the purposes for which the money was advanced are all matters which the American Government might well consider in arranging the terms of repayment. That is, however, their privilege. Our is to honour our signature.” —Aus.-N.Z. Cable Assn. VALUE OF GOOD UNDERSTANDING London, February 2. Mr. Lloyd George sends out the following wireless message to the_ Australian Press Association— 1 As I roll homeward along tho coast of S^ ain ’ the wireless announces that the British Government has accepted the American Debt terms. The details which 1 have received are not sufficient to enable me to form an opinion regarding the character of the terms, but a fraction ot the percentages, however important to an overburdened people, is not comparable in value to the good understanding between these two great communities, on whose co-operation the peace, freedom, and international justice de-pend.”—Aus.-N.Z. Cable Assn. “EUROPE CRUMBLES” t PLEA FOR ECONOMIC CONFERENCE : ■“ Washington, February 2. Senator Capper, leader of the “farm bloc” in the Senate, made a speech m support of Senator Borah’s propoMl for an economic conference. ,Iw sooner we act the better,” he said. “While we are standing on one foot, Europe crumbles. _ The agricultural legislation now being passed by Congross will be of little help to American farmers if Europe enters into economic dissolution, which, it seems, she must do.”—Aus.-N.Z. Cable Assn.