King Country Chronicle. Saturday, March 12, 1932. WORLD FINANCE AND WAR DEBTS.

King Country Chronicle, Volume XXVI, Issue 3442, 12 March 1932, Page 4

King Country Chronicle. Saturday, March 12, 1932. WORLD FINANCE AND WAR DEBTS.

A message received a Tew days ago announced’that the holdings of gold by the Bank of France now exceed those of the Federal Reserve Bank. Almost simultaneous with this is the further announcement that France is owing Great Britain the sum of £227,000,000 on acount pf war debts. The original sum. due .to Great Britain on acount of war debts was £600,000,000, but a remission of 62 per eept. on this account was made by Great Britain. At the date of the funding of the war ffebts the total amount owing to Great Britain by her European Allies was £1,245,615.200 According to a statement by the Chancellor of the Exchequer, Mr. Neville Chamberlain, the value of these debts to-day is £387,274,200. This means that Great Britain has written off the enormous sum of £858,341,000 of the war debts owing to her, or 68 4-5 per cent, of the total debt. When Great Britain negotiated with her Allies for payment of the war debts due to her, she only asked sufficient to meet her payments to the United States,- but these payments to the United States up to the end of last year had exceeded Great Britain’s receipts from the Allies by the enormous sum of £225,000,000. With these figures it is difficult to understand that France has the greatest hoarding of gold the world has ever known. There are ' many other things difficult to understand about these war debts. Great Britain financed the war, for it would

have meant an easy victory for the Central Powers had it not been for British gold, the British Navy and the British Army. In view of the part Great Britain took in the war, it might have been expected that France at least would have discharged her full obligations to the country that saved her from German domination, but according to the .figures submitted by Mr. Chamberlain the Allies have not kept to this agreement. Yet in face of all the sacrifices of her people to honour the country’s obligations, Great Britain is more than holding her own amongst the nations. France has shown' no gratitude for the part Great Britain took in the war, but has adopted a selfish and self-centred policy which is largely responsible for the world’s troubles to-day. The effects of this policy is now being

felt, and the world depression has now extended to France. The only statesman that France has had during the last sixteen years with a sense of justice was M. Briand, and now this statesman has passed away, with no one left in France to take his place to help in the rehabilitation of Europe and the world generally. British bondholders were paid back in the depreciated franc of 2d,, when it was borrowed on the basis of lOd. When Britain was forced to scrap free trade, France immediately retaliated by surcharge onl

all British imports. The troubles of France are now beginning, and little sympathy will be felt for her by the British nation. The attitude of the United States over the war debts is on a par with that of France. Great Britain of- j fered to cancel the whole of the war debts owing to her if the United States did the same, but this offer was refused The United States made a stipulation that these debts should be paid in gold, but this is an impossible task for the reason that these payments i*epresent more than the monetary gold of the world today. Great Britain, however, is honouring her payments at the rate of £33,000,000 a year, and this has compelled her to suspend the gold standard. It was Great Britain that established gold as the world's currency, but both France and the United States have abused the gold standard, and, as it is becoming apparent day by day, with small benefit to themselves. The United States has realised this fact long ago, but will make no concession to Great Britain or the other debtor countries for political reasons. To release her present gold hoardings would create a dangerous situation in the United States, and it is now lying underground in vaults. Some of the gold is being sent to France to relieve the congestion in the United States, but the sterilisation policy is only being shifted from one country to another. In the meantime the pound sterling, which practically means the integrity and honest dealings of Great Britain, is holding its own, and may probably make a full recovery within twelve months. If this can be achieved and other countries follow Britain’s example and suspend the gold standard, the hoardings of France and the United States will rapidly deteriorate in value. Great Britain, with the co-operation of the Dominions, and other countries which go off the gold standard, can create a new system of cui'rency and trading, and the United States and France may yet be forced to link up with the movement. During the last few days the value of gold has fallen. When Great Britain went off the gold standard the price of gold went as high as £6 6s. Bd. an ounce, which means that the value of the pound sterling was about 13s. 7d. This week gold has dropped to £5 15s. Bd., making the pound sterling 14s 9d. 'Every depreciation in gold values means the appreciation of the sterling, and the- tendency during the last five months is for gold to drop. It seems a slow, but it is a 'steady niovement towards the British pounds’ return to parity with the United States dollar and the French franc. All through the financial crises of the last twelve months not a ,bank in Great Britain closed its doors; in the United States scores of .banks have been forced to do this. The United States has to face a. colossal deficit in its national budget; Great Britain' gives every indication of balancing her budget this year, even though she is giving assistance to the unemployed, which the United States Government is not. All through the world troubles of the last five years British industries have held their own, even though they have shown no development; in the United States trade is falling away month by month, while the same position obtains in France, where the unemployment figures are daily mounting. All through the world’s financial chaos, Great Britain has made no complaint, but has met all her obligations, unfair as many of them were. The United States and France must now realise that the wealth of a country is not measured by gold, but by- trade and commerce.