The Hawera Star. SATURDAY, MAY 28, 1932. BRITAIN’S DEBT PROBLEM.

Hawera Star, Volume LI, 28 May 1932, Page 4

The Hawera Star.

SATURDAY, MAY 28, 1932. BRITAIN’S DEBT PROBLEM.

Delivered every evening by 5 o'clock in Hawera, Manaia, Kaupokonui, Otakeho. Oeo. Piharria, Opunake, Normanby, Okaiawa, Eltham. Ngaere, Mangatoki, Kaponga, Awatuna, Te Kiri. Mahoe, Lowgarth, Manutnhi, Kakarainea, Alton, Hurley vill«, Patea, Whenuakura, Waverley, Mokoia, Whakamara, Ohangai, Heremere, Fraser Road, and Ararata.

It is reported that Britain is arranging to pay to. America, besides the formal annuities, a further annual sum to make up for the payments suspended under the Hoover moratorium. The Basle report lias made it abundantly clear that Go,many, at any rate for the present, is unable to continue reparation payments, but if Britain has to pay America she must either pay entirely out of lier own finances or collect the sums due to her from France, Italy and the other allies. If she has to collect these sums, France and Italy will probably have in turn to insist on some German reparation payments. This might mean the financial collapse of Germany. The total indebtedness of Great Britain to the United States is over £931,000,000. Great Britain .is owed by France, Italy and other allies £1 120,000,000. Therefore she would appear to have a favourable balance of payments, but the payments due to- Britain are largely dependent on what Germany can do. In the past year Britain has given a lead to the world in the splendid effort she has been making to meet her obligations, and it appears that she is determined to continue, her efforts even at a tremendous sacrifice. It is stated that further huge economies totalling £50,000,000 are planned, and an emergency Budget is to be brought down. Recent events have suggested that Britain was rising above her troubles, but the latest cables give renewed force to the warnings Uttered from several quarters that the nations must act together in their endeavour to restore a better condition of affairs m the world. Economies in Britain will have a still further depressing effect upon the level of prices, and the aim of national policy, it has been fully realised, should be to put an end to the disastrous downward trend. Markets have been contracted, and the unsatisfactory economic condition of all the leading countries at the present time is inextricably bound up with the question of war debts. The great creditor nation is the United States, and Britain’s aim is merely to collect enough from her debtrs to pay what she owes to the United States. Several years ago Great Britain remitted a substantial amount of the debt due to her from France, and made a still greater concession in Italy. So far no steps have been taken to reduce the debts due by the Dominions to Great Britain. These debts total over £110,000,000, of Which New Zealand’s share is £24,000,000. Under the present funding arrangement New Zealand is to wipe out her debt by 1959. Sir Edward Grigg has suggested that Britain might be generous to her own family as well as to foreign countries. Great Britain showed generosity last year in extending the benefits of the Hoover moratorium to the war debts due from the Dominions, and New Zealand was glad of the concession. It seems reasonable to believe that, if there were a substantial . all-round reduction in war debts, New Zealand would benefit with the rest of the Empire. There are strong arguments in favour of a scaling down of reparations and war debts. With the fall in prices the burdens have grown to an intolerable extent, and the halving of the price of primary products has meant the doubling of the weight of the debt on New Zealand and other agricultural and pastoral countries. But shifting a debt from one nation’s shoulder to another’s may be no remedy. "It should be borne in mind,” says the Basle report, "that the release of a debtor country from a burden of payments which it is unable to bear may merely have the effect of transferring that burden to a creditor country which, in its character as a debtor, it, in its turn, may be unable to bear.” The adjustment of all intergovernmental debts is a necessary step in re-establishing confidence and reviv- [ ing economic stability throughout the world.