Why Britain Must Pay the War Debts

Evening Post, Volume CXV, Issue 147, 24 June 1933, Page 23

Why Britain Must Pay the War Debts

j Whifct is the stake in .this affair of our debt tv the United States? A matter of some millions it seems. It is much moie than that (wrote H. N. Brailsford in "Reynold's Illustrated News"). The financial system itself is at stake. If tho British Empire were to default for a comparatively small sum like, this, without the creditors' consoil, the pillar of confidence on which the whole complicated fabric rests would be shattered. Who after this could blamo tho Irish ' or tho Russians? And with what as-1 suranco could tho City of London dun the South American Kepublics or Australia, or bankrupt Germany, for the debts which ithcy owe to it? The ancient institution of nioneylending has survived many a shock. The' Catholic Church* cursed it. Mahomot forbade it.. But if Prime MaeDonald betrayed it, that would be tho end. He dare not do it, and ho wiU not do it, " •■ Certainly, if there wero anyone in Washington to lend an ear, the British . Government could present an irresistible case. Lot us see what it might say: Firstly,* it'might point out that— Thanks to Mr. ■ Baldwin and Mr. Montagu Norman,, America treated us in a' much harsher ' way than; she treated the French and the (Italians.. She excused tho former 50 and the latter 75 per cent, of their debts. She relieved 113 at1 tho settlement of only 17.7 per cent; .7' ;' " ' Secondly, it can urge tliat it has forgiven the Germans and tho French the whole .of what/they owed to it. Thirdly (and this' is its strongest card), the dollars in which we must pay our'debt havo gono soaring up in value since it was contracted. A dollar was then worth 100 units of mixed goods. It will now buy 154. Finally, how shall wo pay? A foreign debt can be paid only in gold or goods. ■ But most of the world's

gold is hoarded in bank cellars in New York. The rest is in Paris. ' The Bank of England has a reserve. It might be a wiso thing to break that up. But the City would have a fit if that were done, and, anyhow, it would pay only a few instalments. After that ,we should have to pay in goods. But America will not take our goods. Her tariff is designed to keep them out. It succeeds. We-bought from her in the last nine months £59,000,000 of goods, and sold her only £11,000,000. At that rate who could pay a debt? That is our'case. What is hcrsl She says that if we do not pay her, she will have to raise the money from her taxpayers. That is so. But that is what wo also had to do when wo forgave our Allies their debts. . Then she says that wo could pay very easily, if we ceased to squander bur money on armaments. That sounds plausible. Certainly we waste on warships money that would bo better spent on clearing slums. But this has no bearing whatever on our difficulty. Our expenditure ou armaments, stupid and socially immoral as it is, , docs . not lessen our national resources. All that happens is that money is taken from your pocket and mino to fill the safes of the armament makoi'B. It .is not scattered as, a private debtor may scatter his, resources on champagne and chorus girls. It stays in the country. - But our, whole trouble is how to get. it across the Atlantic. America won't receive it. Under-this question of debts and the transfer of money there lies a much bigger assise, The whole world is staggering under the load of . usury. We borrowed 4,604,000,000 dollars'from America. If we ,go on paying punctually .for two generations as arranged, we shall have paid back 11,100,000,000., The Greeks and Romans used to wipe out* all debts' periodically.. If our rulers weie wise enough to* learn that lesson, they might succeed iv saving the day. .:-. ■ -j -.