H.B. TRIBUNE MONDAY. DECEMBER 7, 1931 WAR DEBTS AND TARIFFS.

Hawke's Bay Tribune, Volume XXI, Issue 303, 7 December 1931, Page 6

H.B. TRIBUNE MONDAY. DECEMBER 7, 1931 WAR DEBTS AND TARIFFS.

There are a continually increasing number of thinking people who are fairly well convinced that the world will not be restored to prosperity until the questions of war-debts and tariffs are settled upon some satisfactory basis. Even the United States, the only real creditor nation ami the one with the highest tariff wall, is beginning to understand that the maintenance of her pressent unyielding attitude on these two questions is working to her own disadvantage. This has been pretty fully brought home to people in high places, more especially with respect to war-debts. The real trouble there now is the difficulty in educating the mass of the people up to an intelligent recognition of this aspect of the position and, with presidential and congressional elections coming on next year, legislators are sorely afraid to move unless with popular approval. There is, however, a very noticeable move in the way of bringing the electors to an understandir of how their own country will benefit by a vision of the war-debt position. Following closely on the recent visit of the French Prime Minister, M. Laval, to Washington, wo have published in the American press a very significant statement of the views of the Treasury Department on this point. It was then said that “the scaling down of war-debts owing to the United,

States would not overburden the American taxpayer. As a matter of fact, a cut in German reparations, followed by a corresponding reduction in debts owing to the United States, would probably ease the tax burden on the American citizen by assisting to worhl wide economic recovery.” It was even suggested that a 50 per cent, reduction would not be overmuch. At the moment, of course, America is very strongly actuated by the threat of bankruptcy and virtual repudiation that comes from Germany. Since the war ended American financiers have invested there, in governmental, municipal and industrial loans, many hundreds, indeed some thousands, of millions of dollars. It is now realised that these in vestments are in grave peril unless Germany is in some way further relieved of the burden of reparation payments imposed upon her by the Peace Treaty. Hitherto America has refused to consider reparations and the wardebts owing to her as having any relation the one to the other. All she would take into account was the ‘‘capacity to pay” of her European “associates” in the war. At length, however, she has been forced to adopt a quite different view of the situation as created by her own lavish financial support of Germany—mainly, it may be noted, out of the immense wartime profits drawn from the Allies, and chiefly from Great Britain.

America is also beginning to understand that the liquidation M war-debts owing to her and the imposition of high duties upon imports from her debtors have a very distinct bearing on one another. It is at length coming to her that her insistence on the payment of the debts is altogether inconsistent with the vu tual exclusion of the goods with which alone those debts can be discharged. This realisation has been greatly stimulated, first, oy Great Britain’s departure from the gold standard and, then, by the adoption of a protectionist policy. So it is that we have n constantly widening call upon the American Government from its own citizens for a revision of the high-tariff policy it has hitherto pursued. Not only this, but fairminded Americans—and there arc quite a goodly number of them—see that to require the debtor nations to discharge their money liabilities with goods that, since those liabilities were incurred, have lost anything from 30 to 50 per cent, of their trade value is entirely unjust. In short, America has slowly awakened to the fact that she is in very large measure responsible for the depression that weighs so heavily upon ail trading nations and that has lately affected her quite as acutely as any of the others. There would thus seem to be some fair hope that ere very long the American Government will put into practice the convictions that have gradually dawned upon so many of its people. It may be that it will not have the courage to do this until after the elections of next year. On the other hand, however, Germany’s position is so immediately critical that earlier action may be compelled upon it. It is quite easv to see that the sooner this comes the better for all of us.