TEN YEARS GRACE

Evening Post, Volume CXIII, Issue 80, 5 April 1932, Page 9

TEN YEARS GRACE

AMERICAN DEBT ' WHAT U.K. SHOULD SAY TO U.S. BOUND TO BE A SHOCK ! Much has been heard about the difficulties which Britain has met in paying her American debts. That may not daunt America. "But the time may come," says Sir Arthur Balfour, "when it may be as difficult for them to receive as it in for us to pay." And that would concern America very deeply-": - . ••■ In a speeGh at Sheffield in February, Sir Arthur said that at the end of the war Great Britain owed £900,000,000 to the United States of America, the whole of which had been borrowed to re-lend to Italy and Francs at a time when the United States refused to lend money to those countries directly. It was no secret to-day that Britain had extreme difficulty in keeping both countries going in the war from the point of view pf money; morale^ and material. ; After the _war Americ^a gave a defi- . Bite instruction that no settlement was to' be made with anybody at a less • interest than 4$ per cent, and for longer terms than 25 years. Mr. Baldwin and his Commission succeeded in getting those figures to 3.3 and 02 respective- *?• F?ancc eventually succeeded in getting a total remission of debt amounting to 52.S peri cent., as compared with pur 19.7. Italy held on a little longer and got a total remission of '75.4 per cent. • :' . ■ -j\ ■ ' :'. •.■ ROUT OF AMERICA'S ~ EXPORTS. Tho great, difficulty was- that while, these debts were being paid, the exchange for trading purposes became more and more-difficult.; American exports were now falling off at the rate of from five, to eight millions a month, and she herself was beginning to realise' that this could not go on. There was also the moral side of tho question; There was no doubt ■ that t during the war we held the line- until the United States were ready, and that if. America-cancelled the whole of the debt it would not give us back the lives of our men who fell in holding that line until she came: and'it certainly would not > givei us' back the material loss, .about which wo cared less. lrWha:;' have .the Americans done to help us in regard to these payments? Isothing. They have idone every tiling they possibly could, to hinder us. They have twice raised their tariffs, and have gone in for Prohißition, thus preventing us sending them a lot of liquid refreshment they very, badly need. (Laughter.) Last, but not least—and most serious,- for the moment—they have: not only hoardcd'jgold; but they have sterilised gold." ' The United States claimed very definitely there was no connection at, all between reparations and- Governmental debts. That was not< a fair view. What were they to do? Were they to try- to educate ithe public opinion of America to a sane economic view of the situation? That would be oiie way of doing <it, but they would probably be bled •white by the time they had accomplished it. A united front, demanding redress, was impossible. :. He .thought the. only course was' for Great Britain" to go to" the " United States without waiting for anyone else and say, "You can see our economic situation. We want a ten years' moratorium, or, if you prefer it, a-sub-stantial- revision. One or the other must take place." ; "I! believe," said Sir Arthur, "that they would find it very difficult, in view of public opinion of "the world to-day and the straits they are themselves in to refuse our request. No doubt it will shock them at first,' but it ahvavs does shock one to know one is'not going to get one's money as quickly as one thought." ' , : NO POLITICIAN HAS THE NERVE. -.--.■ , After describing conditions in America, which he said' were alarming Sir Arthur/said that Irade at present was running in the ■ wrong channels Everything was going adrift because they could not be suro-.of the exchange; and until the debts question was settled there would be ho change Everyone knew, exactly what' the problem was, and was fully aware of its effect, but no politician had the nerve to tackle it and tell the world exactly what had to be done *^™ enL Payin-g-t0 t?le States *. <50,000,000, rising eraduallv »tn £39,000,000, for 62 year! We'should receive,' but never had' received £48,000,000 from the people who owed us money. How could those transfers be inadc* By goods, by services, and uy gold. How had. Germany'managed to pay? Since June,' 1919, Germany had paid *2,ooo,ooo,ooo—very largely by borrowing £900,000,000 from the United- States, but also by a drastic're, auction in the cost of living and an astounding reduction in the cost; of production. She became the greatest exporting nation—of manufactured goods —in the world. ; *■ , Economists told him that this big surplus of exports by Germany would dwindle, but he was afraid that the low costs which we, -by our folly, had forced upon them, would take a long 1:1*0. to dwindle, -and we' were going to have a hard road indeed to compete with those low costs. : \ - It would not be wise to at'once cancel all German reparation payments. •If werwere to say to Germany:"You pay, say, £20,000,000 for the next ten years and in the ninth year we will re-examine the whole position," that would be long enough and easy enough for us to got on with the business. Another possible method wouM be. for Germany to pay 20 per cent, of her export surplus every year.