DEBTOR AND CREDITOR

Dominion, Volume 26, Issue 102, 24 January 1933, Page 8

DEBTOR AND CREDITOR

There is considerable speculation as to the probable line Mr. Roosevelt will take when the time comes for Britain and the United States to place their cards on the table for a discussion of the British War debt.. The Tiihaj considers that “unless America is prepared to recast her whole economic policy so as to enable her debtors to pay what they owe (in goods and services), the only alternatives are a settlement on the Lausanne model, or frank cessation of payments.” ' Such has been the profusion of comment on the question in the interval between the original British Note asking for a review of the Debt Funding Agreement and the British Government’s final decision to pay,, that it is necessary to recall one or two incidents pertinent to the British attitude. In intimating its intention to meet the payment due on December 15 last, the Government stated that the system of inter-governmental payments in respect of War debts as it existed prior to the Hoover moratorium could not be revived without disaster,. It stipulated accordingly that the December payment should be regarded as an instalment of capital repayment of which account should be taken in any final settlement. It has since become known that the British Cabinet was divided 6n the question as to whether the payment should be made or not, and it may be assumed that the above stipulation represented a compromise between opposing opinions. The, American Secretary of State, however, declined to accept any payment attached to which was a condition varying the procedure laid down in the agreement. Mr. Roosevelt’s decision to open a discussion on the question suggests that he has foreseen the possibility of a deadlock when the next payment is due, in June next, and is anxious to avoid it if possible. A general refusal ,to pay on the original terms, coupled with a continuation of the economic blockade, would place America in an awkward., not to say dangerous, position. The feeling in the British Cabinet is obviously against any further “magnificent gestures.” In short, the time has come, as The Times says to-day, for “a clear understanding of the realities of the situation.”