King Country Chronicle. Saturday, April 7, 1934. SURPLUS AND WAR DEBTS.

King Country Chronicle, Volume XXVIII, Issue 4528, 7 April 1934, Page 4

King Country Chronicle. Saturday, April 7, 1934. SURPLUS AND WAR DEBTS.

A message from New York states that the British Treasury’s announcement of a surplus will prejudice Britain’s case for a revision of the war debts. It is not at all surprising that such a feeling should prevail in the United States, where the economic, industrial and financial position is most chaotic. This position is mainly due to the narrow and selfish policy of the politicians of the country and it must be gall and wormwood to these politicians to watch Britain, with all her burdens, slowly but surely emerging from the mists of depression and uncertainty. Britain has only managed to achieve a surplus in her national budget through enormous sacrifices on the part of the people, and it would appear as if the United States expects to have all the benefits handed over. The war debts are a legal obligation, but from a moral standpoint payment is not justified. Britain has always taken the stand that while she did not repudiate the war debts, it would be in the interests of

the world and humanity if there were an all-round cancellation, even though she herself would be the greatest loser. She led the way with France •in practically wiping off the reparations due by Germany. It was hoped that the United States would follow suit, and even though it was never expected that the United States would agree to a full cancellation of the war debts due to her, she might be induced to write off at least a portion. This the United States refused to do. She demanded payment in full with interest and in gold. The original amounts borrowed from the United States by Britain totalled £825,000,000; when arrangements for the funding of the war debts were completed the total amount due to the United States reached the colossal sum of £2,221,000,000, the difference being due to interest charges and the difference in currency between the

two countries. Had the United States been willing to have the debt paid in goods the position would have been made very much easier, but her Government would only take gold in settlement. With such a demand it is not a matter of wonder that every country in the world was called upon

to face a financial blizzard. When the war debts were funded Britain only asked sufficient from her own creditors to meet the demands of the United States, but these creditors are not now meeting their obligations. Yet the United States maintains an adamant stand that she shall be paid in gold even though she has more monetary gold in her possession than at any time in her history. But these possessions have not brought pros-

perity or happiness to the people. In the United States there is a wide diversity of opinion as to the justice or otherwise of payment of these debts. There is a wide section which

believe that these debts were incurred in a common cause,'the success of which was of vital importance to the United States. This section also recognises the inequality of the payments demanded by the United States, when, for instance, Britain is paying 82 per cent, and Italy only 26 per cent. When the war debts were funded some of the most eminent economists, of the United States expressed the opinion that the huge payments provided for would have a boomera’ng effect, and these fears have been fully realised. The huge accumulation of gold has brought

nothing but disaster, not only to the United States, but to almost every country in the world. Practically the

whole of the money advanced to the Allies was spent in the United States and actually 15 per cent, more than their total borrowings. It will thus be seen what enormous benefits she reaped on account of the war. After the Civil War and the confederation

of the States, the United States Government repudiated individual State loans by British bondholders aggregating £11,000,000. With compound interest the debt to-day is estimated at £65,000,000, but the United States is silent about this repudiation. The politicians must realise that it would be in the interests of every country, including the United States, to revise the whole problem of war debts. The position as it is to-day means stagnation of finances and industries, lack of confidence in business, and a brake on world trade. Such a revision on a reasonable basis would also assist in promoting better international feeling. If the United States is to press for immediate payment of the war debts instalment because Britain has a surplus after many years of deficits, it will further accentuate the bitterness that these debts have engendered. Had the Balfour Note for a complete cancellation of war debts been accepted by the United States, the position of that country with all other countries would be very much better to-day.