Evening Post. TUESDAY, DECEMBEB 16, 1924. PAYMENT OF WAR DEBTS

Evening Post, Volume CVIII, Issue 145, 16 December 1924, Page 4

Evening Post. TUESDAY, DECEMBEB 16, 1924. PAYMENT OF WAR DEBTS

Those Conservatives who thought that in the Chancellorship of the Exchequer Mr. Winston Churchill had received a reward for his return to the fold which was far beyond his merits have doubtless been reminded during the last week that even with a party majority of 200 there are immense advantages in having a man of courage, experience, and enterprise at the post. The problem of the inter-Allied war debts, about which Mr. Churchill made an important statement on Wednesday, is one of supreme importance to the country, and it is at the same time of such supreme difficulty as to provide ample scope' for all these qualities. Referring to the reported negotiations between France and the United States for the funding of the French' war loan, Mr. Ohurchiil said that they had not gone far enough to requires a formal statement from^Grea't Britain, but he indicated quite clearly-thie line-that the Government.will take when the occasion arises.

At present; he said, the Government did not wish to hinder any arrangements for mutual benefit between two friendly nations allied and associated in the war,1 but considered it essential that any payments made by our debtors in Europe to1 their, creditors in the United^ States should be accompanied simultaneously and pafi passii' by; proportionate payments to Britain. (Ministerial and Liberal cheers.) -. .:

Though the mention of "Ministerial and Liberal cheers" as greeting the remark suggests that' the attitude pi Labour was dubious^ or hostile, the cordiality of Mr. Snowden shows ;■ that this inference is not justified. Mr. Snowden, who is the Labour Party's leading financier, and is not unduly inclined to cordiality, joined with Mr. Eunciman \in wishing the new Chancellor success at the Allied Finance Ministers' Conference next month, " declaring that Mr. Churchill would go to. it with the knowledge that he had the full support of the House in a difficult task" It is pleasant to find that Labour is prepared to extend to the Conservative Government on an international issue the same loyal support which it received from the other parties in its dealings with France and Germany, and that the Liberals also are, in Agreement. It is also to be noted that the full Labour and Liberal support which was thus guaranteed extended apparently a good deal further than the/;<slaim for proportionate payments' that Britain should be. paid by the debtor. States proportionally .and pari passu /with the United States. Mr. Churchill had recalled and reinstated the Balfour Note, of which little, if anything, had been said by any of the three Governments holding office since, its issue.

A second factor, he said, dn the problem was the Balfour Note, the principle of which was that "we will obliterate all the debts owing to us if'we are similarly treated with regard to the debts owing by us, failing which, we-will ask from Europe only as much as the United States requires from us." That principle, expressed three years ago before the settlement of the American debts, still formed the foundation of British policy.

The Note which bears Lord Bal four's name was addressed by him as Foreign Secretary to France, Italy, and other debtor States of Britain on the Ist August; 1922. No formal communications had at that time been held' regarding the liquidation of these debts, but ". recent events" had compelled the British Government to broach the delicate matter. The only recent event that really mattered; was the action of the ■ American ' Government, -■ which> " with the most perfect courtesy and in the exercise of their, undoubted rights, 1' had asked for payment of the interest accrued since 19i9 oh the AngloAmerican debt and foi' fepayhierit of the capital by a sinking fund in twenty-five' yeark To- pay up her own war debts ir^full without get^ ting a penny ■■ of the much. larger sums that were owing to'her. was too much even for long-suffering Britain, especially as her indebtedness to America had been incurred on -her Allies' \ccount because America did not Consider the security they could offer for a direct loan good enough. " Speaking in general terms," Lord Balfouf stated the position fas follows:—

• The war debts, exclusive of interest, due to Great Britain at . • tb* present moment. amount in" the aggregate to , ab°ut f'iWOiOOPiPQO, of'which Germany pwes £1,450,000,000, Russia £650,000^--OQO, arid our Allies filjoOCOO^ObO. . On Tre-i.° j' Mkild) Gw?t Britai» owes the umted States about a quarter 01 this sum, say, £850i000,006 at ■ par of ex^ change, together with interest accrued since 1919. . •

On paper the offer which Lord Balfour made, viz., ." if such a policy formed part of a satisfactory international settlement, to remit all the debts due to Great Britain by our Allies in-respect of. loans, or by Germany "in respect of reparations^' was a munificent' one. And even after writing off tier obviously rotten investment — the £650,000,000 due by Kussia —it ■was a generous one. But looking at the matter in the spirit of Wall Street and not of war comradeship; America received the Baifour JNote \vith coldness and suspicion, and compelled Britain to toe the liae, Ths interest paid tb Atfasi'iga last yeas easeeeded £29,000, W. aad

the sinking payments were nearly £5,000,000. Not a penny has Britain received on account of her loitn to France of £508,000,000, but negotiations are on foot for the funding of the Fronch debt of , £650,----000,000 to America. Britain, says Mr. Churchill, still stands by the Balfour policy of a general cancellation of debts, but if the offer is still rejected she asks for equal treatment with the United States by a nation which is under substantially equal obligations to them both. The " New York Herald Tribune " recognises no higher rule in the matter than that of " sauve'qui peut," or " the devil take the hindmost." We hope and believe that 'the mind and conscience of America find more accurate expression in the " New York World's " hearty approval of Mr. Churchill's request :

This attitude is fnir io the -United States. It is not fay a single inch more than fnir to Britain. As a great trading and investing nation the United States cannot in the long run offend or imperil world trade relations by insistonce upon treatment as a preferred creditor.