WAR DEBT PAYMENTS

Greymouth Evening Star, 28 June 1934, Page 7

WAR DEBT PAYMENTS

BRITISH GOVT’S REPLY. [BRITISH OFFICIAL WIRELESS.] RUGBY, June 28. The reply of His Majesty’s Government to the United States Government war debt note, of June 12, was delivered in Washington to-day. The following is the text: —“After careful consideration of the note which you addressed to Sir R. Lindsay on June 12, His Majesty’s Government feel, that there are two questions to which it may be useful to make further reference. In the first place, the British Government would observe that in their note of June 4, they did not state that the payment of the British war debt was legally contingent upon the payment of debts due to them. What they said was that it would be impossible for them to contemplate a situation in which thev would be called upon to honour in full their war obligations to others, while continuing to suspend all demands for payment of war obligations due to them. This was a statement not of law, but of fact. 1 ’

Secondly, as regards the suggestion that payments be made in kind, the British Government would recall that experience of German reparations showed that the transport difflcujj ties are not solved by a -system of deliveries in kind. As the Committee presided over by General Dawes pointed out in 1924, in their financial effects, deliveries in kind are not really distinguishable from cash _ payments. In fact, the economic objection to cash payments would apnly with equal force to deliveries in kind, unless these deliveries were to consist of indigenous products of the debtor country, excluding' re-exports, aiid unless they were to be accepted by the creditor country, and consumed by it, in addition to goods taken from the debtor country in the normal course of trading. It the United Kingdom were not to receive payment for goods exported on her commercial account, her exchange resources available for the purchase of cotton and other goods from America would be still further diminishGCl “Therefore, while not unwilling to give further consideration to the possibilities in this direction, the British Government do not at present see any method of putting such a plan into practice, which would' be likely to commend itself to the Government of the United States. In the view of the British Government the primary question for settlement is the amount ttyat should be paid, having regard to all the circumstances of these debts. They regret that up to the present, it has not been possible to make further progress in this matter but they will welcome the opportunity of resuming the discussion, whenever it may appear that the present abnormal conditions have so far passed as to offer favourable prospects foi a settlement, since they are sincerely anxious to remove from the sphere of contio versy all or any matters which might disturb the harmony of the relations between the tivo countries.