The Guardian (And Evening Star, with which is incorporated the West Coast Times.) TUESDAY, APRIL 10th, 1923.

Hokitika Guardian, 10 April 1923, Page 2

The Guardian (And Evening Star, with which is incorporated the West Coast Times.) TUESDAY, APRIL 10th, 1923.

AMERICAN DEBT ACRE KM EXT. GKNF.it.vr. satisfaction has been expressed, says a London financial journal, with the news that an agreement, has been reached with the American Debt Commission in regard to details for the repayment of the amount hy Great. Britain to the Cnitod States. This agreement swiftly followed the acceptance by the British Cabinet of the terms put forward by America. For the first time ft figure has been definitely fixed as the amount of the debt. According to the finance accounts of the United Kingdom for the year ended Ma rch 31st last the principal was placed at -1,160,318,338 dollars, while there was a liability for unpaid interest amounting tc 509.148.000 dollars, which made the total sum 4,675,466,358 dollars. At July 3lst. Inst the figure was given by the United States Government at 4.135.818.358 dollars, but that amount presumably did not. include accrued interest. The principal of the debt has now been agreed upon at 4,604,128,085 dollars, but in comparing this with the amount shown in the British finance accounts it has to be remembered that during the last year Britian paid a sum of approximately 100,000,000 dollars on account of accrued interest. The amount of the debt is to be reduced to 4,600,000,000 dollars by an immediate cash payment. The last-mentioned total represents £980.-

000,000 at the cun-cut rate of exchange, while with sterling at parity it would be £925,000,000. Obviously the rate of exchange makes a substantial difference, a fact brought out by Mr Walter Leaf at the annual meeting of the Westminster Bank, for he showed that the recovery of the £ in terms of dollars reckoned from the lowest point meant a diminution of debt to the l nited States of over 432,500,000. The terms agreed upon for repayment me an iuteiest rate of 3J per cent, for the first 10 years and of 1 per cent, for the next 52 years both being inclusive of a sinking fund of 1 [ter cent., the operation of which u ill he more effective with the progress of time, because of the gradual reduction in the amount of the principal. The terms mean that we shall have to provide 101.000,000 dollars for the next ten years, but whereas in the first year 138,000.000 dollars will be for interest and 23,000000 for redemption, the second year’s interest will be 137,310.000. dollars, and the sinking fund about 23.690.000 dollars. At the current exchange the 161,000.000 dollars payable for the next ten years represents £34.400,000 and with an impiovemeiit in sterling to par it would be £33.000,000. Apparently, therefore, a sum varying from £33.000.000 to £31,000.000 will have to be paid to America for several years to come, ti is a serious hut den. especially as there is. no immediate prospect of Britain getting back any part of the huge sums advanced to the Allies in Europe. It represents an amount of about onesixth of the pre-war revenue, and if is perhaps scarcely necessary to say that the money owing to Britain, by Europe exceeds considerably that which Britain owes to America. The difference, indeed, is about £882,000.000.