WAR DEBTS

Grey River Argus, 7 December 1932, Page 5

WAR DEBTS

ITALY WILL PAY Fascist Decision (Aus. & N.Z. Cable Assn.) (Received December G at 7 p.m.) ROME, December G. The Fascist Grand Council have decided that Italy will pay her war debt to America. Hoover’s Concern

BETAIN’S EXCHANGE BURDEN (Received December 6 at 10.5 pan.) WASHINGTON, December 6. Diesidon'i Hoover to-day decided ;o transmit a special Foreign. Affairs' Note to congress late this week. It will incorporate debt recommendations. It will perhaps also discuss the Dis armament and Economic Conference"-. Mr Hoover abandoned the idea ot waiting until December 15, when he became satisfied that practically all ef th;* methods designed to ease tne. exchange burden on Britain through making the debt payment had been ex] lorod without any remedy being found. It is end.’/stood that this information has been transmitted to the debtor Goveimmenls, through diplomatic chan nols Goods Not Gold BRITAIN’S THREAT. TO PAY AND TAX U.S A. IMPORTS

KOO,BA*. December 5. Mr Baldwin (Acting-Prime Minister) had a conversation with Mr Mel lon, and discussed various points in th: British Note. As some misunderstanding has occurred regarding the reference in the British Noto to the consequences of th'* resumption of payments, the exact words of the Noto on this subject are creating particular interest. After making the point that the discharge of all international debts must finally take the form of a transfer of goods and services, said: “If, therefore, war debts payments had to be resumed, it is apparent that the exchange position in this country would need to be strengthened by a reduction o'f the very heavy adverse balance of visible trade between the United Kingdom and the United States, which amount'd to £78,000,000 in 1931. In the present circumstances, this could only bo done by adopting measures which would further restrict British purchases of American goods. The United Kingdom has, up to the present, generally been the best customer of the United States, and t.h 0 result of such restrictions would inevitably be to reduce specially the market in the Unite! Kingdom for American products, io the extent there of more tha n the payments resumed to the United States Treasury. Definite and unfortunate inaction must follow to the United States producer. Moreover, His Majesty’s Government also have to guard against the efforts which would follow, if facilities were offered by the British market used by other debtors than America, to obtain sterling, which they would then sell across ex change to moot their obligations to the United States Government. After the war. the United Kingdom attempted to maintain the traditional system of free imports, with the* result that the debtor countries throughout the world sold goods on th > British market, a nd took the proceeds away over exchange or in gold, to meet their obligations elsewhere. Under the stress of the present crisis, I His Majesty’s Government have had | to modify their system, and to adopt 1 tariffs, but the United Kingdom still imports from abroad foods to the value of several hundreds of millions of pounds in excess of what it exports. It will be necessary to consider what- action could be taken to secure that the sterling proceeds of these imports were used more largely j for the benefit of the British market.