The Gisborne Times THURSDAY. JULY 16, 1936. THOSE UNPAID WAR DEBTS!

Gisborne Times, Volume LXXXV, Issue 12914, 16 July 1936, Page 4

The Gisborne Times THURSDAY. JULY 16, 1936. THOSE UNPAID WAR DEBTS!

The “battle” for the Presidency of the United States will hold much interest for outside nations if only on account of the Republican claim that the war debtors should again be called upon to fulfil their obligations, lu the .'Republican policy, it may have been noted, it is estimated that Briinin and the other Allies still owe the United States the huge sum of £2,400,000,000, which is only half of what would have been the aggregate if readjustment agreements had not been made. In all the war debtors bad up till 1901, when they declared a moratorium, paid to the United States round about £525,000,000. Today the defaulted interest and principal instalments are held to reach .£203.000.000. It- is, of course, wellknown that, after 1931, Britain and her Allies told the United States very bluntly that a new debt revision conference would require to be held on account of their own excessive internal indebtedness. Further payments on tho then basis were, they said, impossible on account of (1) the stoppage of German reparations t.. tho Allies; (2) the dislocation in currencies arising from such heavy payments and (3) the high American tariffs which made, it difficult to scii goods to the United States. As a matter of fact, Britain, in particular, became unwilling to continue sending heavy shipments of gold across the Atlantic. Her major plea, was that, if the United States would lower her tariffs, she would be prepared to despatch larger quantities of goods, which is, indeed, tho principal means by which one nation can, to-day, discharge its debt to another. But the United States authorities remained adamant against any further scaling down of either interest or principal. As a veorisal for continued defaults, what it did was simply to pass what in known as the Johnson Act of 1934 which prohibits additional loans to tho nations in default. In Republican circles, non-payment on the part of the war debtors is regarded as a terrible state of affairs. Senator Borah is the chief advocate on that political side upon insistence of payment and ] 1( ; has repeatedly said that the war debts should bo paid to the full face value of tho existing arrangements. On their part, the Democrats have been content to allow the matter of default to continue to stand over. What they have all along hoped is that Franco would come off gold, in which event it would be possible to make currency adjustments affecting all the war debtors. But France continues to cling to the gold standard. I*; had also been hoped that it might bo possible for tho United States and her debtors to engage in reciprocal trade agreemnts under which the war debts might bo whittled down. No such reciprocal pgreements have, however, been found feasible. In all the circumstances, it seems idle lor the Republicans to expect to catch a majority of the votes at the Presidential election merely with tho cry ‘ that every effort, must bo made to collect tho Avar debts.”