WAR-DEBTS PROBLEM

Dominion, Volume 26, Issue 185, 3 May 1933, Page 10

WAR-DEBTS PROBLEM

Some Aspects of Nations’ Burdens Reviewed ADDRESS TO ROTARIANS Referring to war debts at the Rotary Club’s luncheon yesterday, Air. M alter Nash, AI.P. for Hutt, said that in thinking of the subject one had to classify war debts under three headings—reparations, inter-governmental debts, and internal debts. When anyone referrod to war debts he should be made to state exactly what he meant. As to reparations, the committee set up after the armistice ami peace to go into the matter considered that Germany should pay £24,000,000,000, at the rate of £12,000,000 a year. That was reduced by the Dawes report to £22,000,(100,000, by the Young Plan to £20,000,000,000, and finally at Lausanne in 1931 the amount was brought down to £15,000,000,000, and Germany ' was granted a moratorium of three years. So when a person declares that war debts should be wiped out lie should define what he meant. Personally, he did not think that Germany would make any further payments toward the reparations. Pacifist and Patriot. As to internal debts, Air. Nash illustrated the complexity of the subject by instancing the case of two men each with £5OO to invest in 1917. The one an ardent and sincere pacifist, and the other a keen and equally sincere believer in sacrificing all to prosecute and win. the war. The former refuses to subscribe to a Government war loan, owing to his principles, and invests his money elsewhere; while the other subscribes his money to the war loam If such internal loan werp wiped out the patriot would lose all, while the would be placed in the position of having exploited his own country. So it behoved people to know what they were saying when they referred to war debts. The inter-governmental debts presented tremendous difficulties. At the time of the armistice the amount owing by Great Britain to the United States was £850,000,000, which increased when funded to £950,000,000. Air. Lloyd George made an effort to get the debt written off, but America, replied that it was a straightforward debt for goods ordered and supplied, and it must be paid. Then the late Earl Balfour made the finest offer possible- On behalf of England he wrote to the United States making the offer that if the States would wipe off ■ her £950,000,000 debt. Great Britain would wipe out the £2.600.000,000 owing to her by the Allied Powers and also forego the whole of the reparations. But it was of no avail. Yet , the United States at the commencement of the war in 1914 had an external debt of £600,000,000, and in 1928 had an external credit of £3,000,000,000. Great Britain’s Offer. When the funding of the Allied debts to U.S. took place they had grown (at 4t per cent, interest) to the following amounts: —Great Britain, £920,000000; France, £805,000,000; Italy, £408,00.000: other countries. £10,000,000— a total of £2,313,000.000, payments in annual instalments to continue until 1987. Air. Nash quoted the following table to show the amount of the funded debts and the amounts paid;—

Air. Nash concluded by quoting the Budgetary balances of the various countries at the end of 1931 showing what an enormous strain had been placed upon the finances of Great Britain by her payment of her debts. At the conclusion of his address, Sir Alexander Roberts said it was plain that Air. Nash was master of his subject, and members of the club would be pleased to hear that Air. Nash would deal with other aspects of the war debts question in the near future.

Balance of - Original debt Paid principal Stillions Millions Millions Great. Britain .. 920 3f>2 879 France .. 805 07 4 4 3 Italy .. 40S 19 401 Other countries . 180 47 240 2313 525 2203