ALLIES DEBTS.

Dunstan Times, Issue 3333, 9 August 1926, Page 7

ALLIES DEBTS.

Gradually, though slowly, the debts of the Allies to the United States are being brought to a more or less even funding i ■ .os. As ■ uukorne of the plans already adopted and of others which are likely to be applied, America will soon be required to absorb a vast inflow of payments from her debtors. The recall settlement of the Italian debt funding basis was regarded as a gratifying achievement —from the Amori- - (mu viewpoint-—and it was stated openly Unit bad the preliminaries failed a long; time must have elapsed before Italy v.ouio bi\c been permitted to re-open negoti.i lions. The Italian scheme was more or less similar to that which was applied for repayment of Britain’s obligation to the United States. Settlement is on the basis of a 02 years agreement, with go annual payment of 30,C00,C00 dollars {.CC.000,000) dollars for the first years and 32.500,000 dollars for the next two years, after which it will graduate to a maximum annual payment of 125,000.000 dollars a. year. It. ’is calculated That the payments will aggregate 6817 million dollars (£1,369,000^000) without interest for the first five years, but thereafter the rate will gradually increase from 1 per cent, for the first' 10 years to 51 per unit, for the last 22 years. I lie so-called success of the funding scheme So far approved directs attention once again to the perfectly familiar fact that international payment.sVan be effected only by the transfer of title to property remaining in tlie paying country, the surrender of evidences of indebtedness (which, after ah. is but a refunding process in essence), the shipment of good or of gold or the performance of services. Vet the fact remains that creditor nations as a rule, notably the United Slates—the b irgest and most; important creditor nation—have since the war steadfastly refused to take that economic axiom into consideration when debt arrangements were in the process of formulation. Great Britain, thanks to her long experience is international financial affairs and to the peculiarities of her present position, has perhaps shown a gi eater willingness to face the facts than any other creditor nation. but certainly elsewhere, there has been a marked refusal or failure to think such questions through to (heir ultimate conclusions or. at Die very least,, to net, a-I if such study had been .given them. The danger in America’s ease, as presented by the '‘.Journal of Coimhercc,” is perhaps, chiefly that in the process of time

delator nations will pay its Government their debts simply by obtaining the needed dollars directly or indirectly from private. meric,ill investors, thus leaving on the •shoulders of individual citizens the weight of the problems which the United States Government refuses to face. '■ The time will doubtless come when sonic progress may be made in shifting public interest from technical arrangements to fundamentals. but that time Is not yet. Figures regarding the position of war debts owing to Britain were given in the financial statement circulated after the Budget. Amounts of war loans to dominions and colonies and loans to Allies aggregated, on March 31 last. as compared with £2,236.003,000 at March 31, 1925. The' reduction was entirely due In the arrangement with Italy, whose war debt fn Britain is now £274,750,000. as against £582,500,000 a year ago. The amount owing from Franco increased from £620.500,000 to £647.000,000. and that from Russia from £765,750.000 to £794,500.000. The amount due from the Dominions is mil at £128,250.000. as against £129.750.000 a year ago. In addition lo the arrangement with Italy, a funding agreement, has been made with llouniania for £31.250,000. Other countries, loans to whom are lepacable by instalments, are Belgium. £9,000.000: Belgian Congo. £3.600.000: Poland. £4.923.000: Estonia, £1.165,000: and Czecho-Slnvakia, Hungary, Latvia and Greece for small sums.