THE H.B. TRIBUNE THURSDAY, APRIL 5, 1934 WAR DEBTS AND THE BRITISH SURPLUS.

Hawke's Bay Tribune, Volume XXIV, Issue 95, 5 April 1934, Page 4

THE H.B. TRIBUNE THURSDAY, APRIL 5, 1934 WAR DEBTS AND THE BRITISH SURPLUS.

It was hardly to be expected that the news of the British Budget surplus of £31,000,000 announced at the end of March would be received without interested comment in the United States. The reference to the surplus by the Washington correspondent of the ‘‘New York Times” shows that no time has been lost in relating it to the subject of war debts. The statement made is that the existence of the surplus “will prejudice Britain’s case for war debt revision” and that the effect of it upon American public opinion will be that sympathy will be lost with the British position. Although it was expected, however, it is difficult to see in what wav such a mental reaction to the announcement of the favourable British balance can be justified by the facts either of the present or the previously existing situation. It will be remembered—or it should be—that Great Britain, during the discussions on war debts with America never for one moment pleaded inability to pay. The question of her indebtedness was approached from the point of view of international expediency, and it was argued that more harm than good would result from acquiescence in the American demand for the payment of the instalments in full. It was pointed out that more is owed to Britain than Britain owes, and that in order to meet the American demand, suffering and hardship would be imposed not only on Britain but on other nations. These arguments still hold good apart from any question of a surplus or the lack of it. There might even be room for a useful argument as to what would have happened at the present time had the British Budget failed to balance itself by an equal amount on the other side. It is certain that Britain would not even then have pleaded poverty, and it is more than doubtful if America would have made any comment on the side of easing the existing burden of war debt payments. It is necessary to realise that the views of America as they are at present reported do not necessarily represent the considered I opinion of the officials in Washington. Possibly a good deal of the truth of the matter lies in the fact that the masses nF the American people have a naive and somewhat ill-informed idea that there is a direct parallel between international and individual indebtedness. Britain owes America money; Britain is now better off, therefore Britain should pay more. So, it may be Imagined, runs the popular argu

ment. But international financiers know that it is not so simple as all that.

Possibly, again, the attitude of America may be influenced by the fact, that at the same time as Britain can record a surplus, she is forced, in spite of all the efforts represented by the national reconstruction movement, to face up to a very heavy deficit, which is calculated at something like £542,000,000 for the first nine months of the year. It is easy to understand that in the face of such a vast sum the tendency for many will be to look around to find some externa] means of redressing the balance; but equally, it could be retorted that even Britain’s £31,000,000 surplus, if it could be made available in full, would be but a small drop in such a large bucket. In the meantime we must await an official statement from Washington, and it is very much to be doubted whether the popular view of the matter will be corroborated by those who are in the position to understand the realities of the situation as they refer® to war debts.