The Evening Star MONDAY, JANUARY 23, 1933. AMERICA AND EUROPE.

Evening Star, Issue 21317, 23 January 1933, Page 8

The Evening Star MONDAY, JANUARY 23, 1933. AMERICA AND EUROPE.

When Britain’s debt payment fell due on December 15 the United States was. just recovering from the turmoil of the Presidential Election. It was unfortunate that the date of the election should have fallen at such u critical time, for it precluded anything effective being done in the way of efforts to bring about a settlement of the war debts problem. The matter was further complicated hy the defeat of the Hoover Administration. Had the Republicans been victorious the Government would have been in a position to go straight ahead with a well-defined method for entering into discussions with the, debtor nations. Mr Roosevelt’s success meant that the United States, for four months at least, was placed in the position of having no Government so far as major matters of policy are concerned. In ordinary times this does not matter much, but when a crisis of international urgency arises an embarrassing situation is created. It is satisfactory to note that matters arc now to be expedited in the discussions on war debts between Britain and America, President Hoover and Mr Roosevelt having agreed on a method of procedure that will prepare the ground for the new Administration when it assumes office on March 4. America is forced by thp pressure of economic circumstances to take action. Emerging from the war and the postwar settlements as the richest nation on earth, she is beginning to realise, with ten or twelve millions of unemployed within her borders and her financial resources greatly shrunk, that that wealth was illusory while the rest of the world is held in the chains of poverty. Realising that her position is untenable, America is prepared to bargain with a view to making a readjustment. It was Mr Baldwin who went to Washington and made the debtfunding arrangement. Now, when the effects of the spurious prosperity created by the war are being disastrously felt, America has consented to receive another delegation to consider the position with a view to a loss burdensome arrangement. Lord Reading paid a visit to the United States towards the end of the year, and on his return to London he gave an address to the English-speaking Union, in which ho put the position very plainly. The chief points of his remarks were that when the agreement was made with the United States no one foresaw that fourteen years after the Armistice Britain would be in its present position, and no one could have predicted that a world depression, so groat and so critical, would have been experienced. In the debt settlements tlie arrangement was loss favourable to Britain than to any other country. She paid more than other nations, and she forwent groat portions of the debts due to her from other Governments, claiming only that she should receive from them sufficient, added to the reparations, to enable her to make the payments to the United States. Lord Reading pointed out that wh?n the

debt was fixed at a certain sum Britain believed and the world believed that she would get reparations paid to her. There is now’ no question of her getting reparations. The point for America to remember is that Britain, while paying her instalments with unfailing regularity up to the present, is not herself receiving any of the payments due to her. Another thing to hpar in mind —and one of the most important—is that “ if we consider the value of goods and commodities at the time the settlement was made it takes at least twice the amount of goods today to pay the same amount of money. Therefore the burden is at least twice as great to-day as it was then.”

This decision of America to open tip five debt question to discussion is bringing the (position to a vital, and let us hope a final, stage. Her statesmen now’ realise that the present conditions cannot be continued. Even if Britain went on paying it is clear that the other nations would not, so that it will bo wisdom on the part of the United States to face realities. It may be presumed that she will bargain hard. ‘ The Times ’ suggests that “ the situation can only be saved by wiping out the whole entanglement and accepting a payment in full settlement; otherwise general world default is inevitable, and Lausanne and the World Economic Conference are doomed.” The appeals to sentiment that America, as one of the Allies, slwukl throw’ off the groat war debt burdens fell on deaf oars. Now’ the appeals have a hard commercial and financial basis, showing that w’orld poverty means hard times for the United States. The thought of being commercially isolated is alarming to America, and the fear of being politically isolated, in view of the conditions in the Far East, is equally disturbing. It is demonstrated beyond doubt that she cannot live to herself alone, also that by her refusal to accept goods and services in war debt settlements she created a position that made a continuation of payments on the present basis impossible.