The Hawera Star. MONDAY, NOVEMBER 6, 1933. THE WAR DEBTS.

Hawera Star, Volume LIII, 6 November 1933, Page 4

The Hawera Star.

MONDAY, NOVEMBER 6, 1933. THE WAR DEBTS.

Delivered every evening by 5 o’clock in Hawera. Manaia, Kaupokonui, Otakeho Oeo. Pihama. Opunake, Normanby, Okaiawa, Eltham, Ngaere, Mangatoki, Kaponga, Awatuna, Te Kiri, Mahoe. Lowgarth, Manutahi, Kakaramea, Alton, Hurleyville, Patea, Whenuakura, Waverley, • Mokoia, Whakamara, Ohangai, Meremeie. Fraser Road and Ararata.

To-day’s cables inform us that the conversations between President Roosevelt and the British war debt delegation have terminated without an agreement being reached. Though the news is disappointing, it does not mean that the world has to give up all hope of an agreement being reached on this issue. Even in America the realisation is growing that debtor countries cannot continue paying nor can America forever treat non-payers as defaulters. The depression has taught Americans some hard lessons about debts. They have witnessed within the borders of their own country a rebellion of debtors and they' have found it necessary to readjust some of their conceptions as to what constitutes strict honesty in the debtor-creditor relation, as well as to consider whether creditors serve their ow'n best interests in holding debtors to the last letter of agreement regardless of circumstances. The policy of currency inflation which may American legislators so strongly favour would, if put into operation, have the effect of scaling down the American Government’s debt to its citizen-creditors. Willingness of Americans to have their Government accept reduced war debt payments would be only consistent with citizens’ willingness to accept pay'.ment from their own Government. It has to be recognised in America that debts, for one reason or another, are not being paid on old levels. The real debt question to-day r is not, “how much can creditors squeeze out of their contracts?” It is, “on what basis can creditors and debtors serve their common interests, which depend on reconstruction of world prosperity"?” The war debt question is not, “where were we yesterday?” It is, “where are we going and where shall we bo to-mor-,row?” The more sensible attitude for Americans to assume would be a readiness to consider the British war debt not merely' as a matter of dollars and cents, nor as a matter of living up to the letter of an agreement, but as a question whose reasonable settlement would be a big stop toward restoring the international econqmic balance

This is true not because of the economic importance of this debt, which is often exaggerated, but because of the political effects and the effects on business sentiment which settlement would have. President Roosevelt’s acceptance of token payment, and his desire to keep free from interference by Congress during the negotiations, show his understanding of the present need. He knows that the unwillingness of Britain to default protects not only Britain but the whole system of world credit. These facts, and the growing possibility of reviving world trade, lay a grave responsibility on American shoulders. Americans need not sacrifice justice nor national well-being to fulfill this responsibility. They probably will have to sacrifice a purely book-keeping point of view-—and they will have to make clear to Congress that they are ready to abandon impossible claims and turn their attention to methods of reconstruction.