A WORLD IN DEBT

Evening Post, Volume CIV, Issue 83, 5 October 1922, Page 7

A WORLD IN DEBT

ENGLAND CAN PAY

AMERICA

BUT CAN GERMANY MEET

CLAIMS?

ONLY WAY TO PAWN FOREIGN . ASSETS. I

(ONITID MSISS ASSOCIATION.—COrouUHf.)

(AOSniAtIAH - NKW ZEALAND CABI.B ASSOCIATION.)

(Received sth October, 9 a.m.) IfEW YORK, 4th October.

The Bight Hon. Reginald M'Kenna, addressing the Bankers' Convention, pointed out that he spoke as a banker expressing his personal views, and not in any representative character.

"Concerning; the' British debt to the United States," he eaid""the primary and essential duty of a debtor k to discharge his liability. Until this is done, all observations on the origin of the debts and the economic consequences of international payments are liable to be viewed with suspicion.

"A creditor may," he continued, "if he likes open questions of that kind, but a debtor should admit obligations without discussion. Kngland has the ability to pay. I can unhesitatingly assert her determination to honour her bond *v fell. I beli&ve I am justified in asking yon to treat the English debt to the United 'State* as certain to be provided for."

Mr. MfKenna- went fuUy into the qoastion of German indebtedness, expressing the belief that she wa3 unable to meet the Reparation demands. He pointed out that even if she were able, it would be by increasing her exports. To do so would mean.she would be compelled to reduce imports, cut profits, and lengthen the working day in order to meet other countries' competition. _The latter would do the same, thus lowering the standard of 'ife ail round, and .rurther upsetting the world's uconoir.ic situation..

Answering the criticism that Geimany was undertaxed, compared \»'th ]>:<aiu, Mr. M'Kenna said be believed Britain was overtaxed, and tJUis was deoLtesiiig national production. His opinion was that the only way ftermaay could approach the Allied demaads would be to persuade Germans possessing foreign assets to sell them to th& Gfrmwi Government at a small profit, siud so U a Guyeminent could turn\ihern over to the creditors.

Mr. M'Kenna added : "No sotation of the Reparations problem ;& possible; unless political considerations are subordinated- to economic facts. This general argument is applicable to other international debts. Only England possesses foreign assets. Italy and France are without similar reserves of wealth. France's debt to England' is far too great to be settled by trade exchanges, England being, utterly unable to absorb the French surplus production. Thus England is tho only nation able to pay the United States interest and sinking fund on her debt; ao other debtor is able to meet more than a small part of his liabilities. A definite postponement of any payment is desirable in the interests of all parties. The actual amount which they should ultimately be able to pay shonld be ascertained by inquiry into their exportable surplus at a full and frank conference between the creditors and the debtors.