WAR DEBTS

Greymouth Evening Star, 29 January 1926, Page 5

WAR DEBTS

ANGLO-ITALIAN AGREEMENT.

“FLEECING JOHN BULL.”

(Australian and N.Z. Cable Association.)

(Received 1 10 am.)

LONDON, January 27. An Anglo-Italian Debt Agreement has been signed. It is officially announced that Italy pays Britain two Millions sterling immediately', and pays four millions each year for the next two years. She pays £4,250,000 for each of the four following years, and £4,500,000 a year thereafter until 1987/ and pays £2,250,000 in 1988. The payments are to be made half-yearly. Mr. Churchill published,-a note exr plaining that the Italian payments are separate from reparations. The agreement includes a clause that if Britain receives more from Reparations and Allied debts than Britain has already paid to the United States, Italy's proportionate share of those payments would be credited to future debt payments. He asserts that the AngloItalian settlement is more favourable than the Italo-American, and describes the agreement as another mile-, stone on the path to European appeasement and consolidation. 'Newspapers emphasise the sacrifice S— by Britain under the Italian settlement. It is understood that France will be next, M. Doumer intending to come to London as soon as the financial debate in the Chamber of Deputies is ended. The “Daily Telegraph’s”' diplomatic correspondent says : The justification for the terms made with Italy lies in the fact that Italy receives so small a quota from the German reparations; also Italy’s frequen’t hearty support of Britain’s European policy. The “Daily phronicle” describes the settlement as “fleecing John Bull.”

The “Morning Post” says: It marks another step in the unification of Europe. It is too late now to repine that the policy of the general debt cancellation was not carried into effect, though it must always be a matter for regret. “The Times” says: Since cancellation is not possible, British policy has been to cancel all except the amount equal 'to the sum paid to America,. In practice, however, we cannot obtain. more than the. debtors are able to remit without strain, otherwise what we might gain in re'payment we should lose in trade, owing to the diversion of moneys from current purchases to the redemption of old purchases.” > The “Financial Times” says that Mr. Churchill wanted some relief from the burden of payment to America, and accepted the.first reason able figure suggested, the Treasury taking the view that a bird in the hand is worth two in the bush. The “Daily Herald” declares: “Once more British Ministers have been taken in by a foreign sob story. The interests of the heavily taxed people have been sacrificed for a visionary political advantage. ’ ’ The “Daily Express” explains that under the settlement, Italy in sixtytwo annuities pays Britain 512 g millions sterling in capital and interest in respect to a debt of 590 millions. This is equivalent to Brotaiii foregoing seventy-eight millions, together with all interest; on the remainder.. The British Treasury had estimated that Italy is capable of paying eight to nine millions yearly. Italy’s gross debt at 5 per cent, represents 7d in the pound of Britain’s income tax. Under the., settlement Italy will reduce this burden by a gd in the pound at the period of the highest payment. “In other words, the British taxpayer will continue to pay 6d in consequence of the debt, and the Italian taxpayer Id. Meantime, Italy has undertaken to pay the United States 481 millions in respect of a debt of 420 millions. ' Britain is paying America thirty-five millions yearly. If we receive four arid a-half millions from Italy, twelve ari’d a half from France, and ten under the Dawes scheme, we Will .be be eight millions annually to the bad.”