Manawatu Evening Standard. MONDAY, DECEMBER 8, 1924. THE INTER-ALLIED DEBTS.

Manawatu Standard, Volume XLIV, Issue 1186, 8 December 1924, Page 4

Manawatu Evening Standard. MONDAY, DECEMBER 8, 1924. THE INTER-ALLIED DEBTS.

It is perhaps only natural that the t 1 liited States Government should be insisting upon some arrangement for the payment of the debts incurred to her by her European Allies in the Great War. It is, however, rather over the odds that the French Government, which has hitherto failed to make any arrangements for the repayment or funding of her debt to Great Britain, should bo now engaged in negotiations with the United States for the funding of her debt to that country. Excluding relief and other post-war loans France was indebted to Great Britain to the extent of £584,0(J0,DU0 on the 31st March, 1922, not a penny of interest having been paid on the debt thus inclined. Italy was similarly indebted to the amount of £'503,000,000, ( and the debts due by theso two countries to Great Britain would alone have more than covered the latter’s indebtedness to the United States, which on the 24th August, 1923, after the payment of 425,700,271 dollars in the shape-of interest, stood at 4,030,500,000 dollars, or, roughly (allowing four and a half dollars to the pound sterling) £1,029,000,000 against the debt of £1,087,000,000 duo from the countries named to Great Britain. We can understand, therefore, the concern which is apparently felt in British official, financial and political circles at the steps now being taken by France to discuss ways and means of discharging her obligations to the United States. It is probable she is doing this under pressure because President Coolidge, in his message to Congress the other day, plainly indicated that it was no part ol his policy, or that of his Government, to cancel the Allied debts, while he further intimated that ‘•those debts should be liquidated at the earliest possible date.” The United States has no right, however, to constitute herself a preferential creditor and to insist on the payment of the French war debt before the British claim is taken into consideration. If France is in a position to comply with the demand the United States Government is apparently making upon her, she should also be in a position to discuss her obligations to Great Britain with the view to their liquidation. The bankruptcy laws, both in Europe and America, only regard creditors in an insolvent estate as entitled to preference in the distribution of such assets as belong to the estate if they are secured by mortgage, bill of sale, or some other recognised security on winch advances have been made, or credits given. With unequalled generosity the British Government undertook the financing of her Allies through the earlier stages of the war and until, in point of fact, she had very seriously depleted her own resources by selling the bulk of her American securities and incurring debts on their account with the United States. Any arrangement which Franco or Italy may make with the United States for the payment of their American debt should not be of the one-sided character which appears to be contemplated, but should march side bv side with a similar arrangement for the repayment of their debts to Great Britain. Even were they only able to guarantee joint payment to Great Britain and the United States of the same amount that Great Britain is paying to America the relief to the British taxpayer would be very considerable.

NON-ALTRUISTIC IN ACTION

It will 1)0 remembered that, when the question of the inter-Allied debts was lirst raised, the suggestion was made that the United States Government should wipe out the British debt and that of the Allied Governments conditionally upon Great Britain also relieving her Allies of their obligations to her. As those obligations amounted to over £2,078,000,000, at the tme the suggestion was made by Lord Balfour, it must be conceded that Britain was setting America a very generous example. ‘‘Uncle Sam” being, however, a ; long-headed and hard-headed individual, failed to see that he was called upon to follow or act upon such a magnanimous idea, w«ieh lie probably regarded as an altruistic bit of folly on Britain’s part. He knew, moreover, that John Bull never repudiates a debt and that he could be assured of payment from Britain sooner or later. But, for all that, it does seem an ungracious act on the part of the United States Government that it should be pressing France for the funding of her debt without giving Great ■Britain the opportunity of obtaining a similar recogniton and dscharge of the French obligations to her. In “Europe's Indictment of America,” Dr. Charles Sarolea blames America for the financial collapse of the foreign exchanges by her policy in draining the gold of the world, as a result of which, to a very large extent, she controls the world’s money markets and is also largely responsible for the high prices ruling. “Her resources,” Dr. Sarolea reminds us, “have remained intact while Europe has been ruined. She has gained a virtual economic monoply, and she is using that monopoly as recklessly abroad as her trusts have used their monopolies at home. The methods of the United States (ho says) are strikingly like the methods of the Russian Bolsheviki. The Bolsheviki expropriated and massacred the capitalists; America more cunningly lias appropriated the capital. America alone could have extricated the old world from its desperate position. America alone was not directly involved; she alone lias the necessary resources. She refused to give any assistance. What was the European Hecuba to her? Was she her brother’s keeper S' She thought, no doubt, that she was following a policy of enlightened self-interest. She was grievously mistaken. She lias not only been selfish and hypocritical; she has also been stupid. Tim day of retribution is hound to come, for Europe is suffering terrible straits, while America lias wantonly destroyed her best markets and let loose the 1 forces of disorder which will destroy her after they have completed the destruction of Europe.” That is the opinion of a gentleman who is regarded in America as “Europe’s most noted scholar,” and the average Britisher will probably agree with Dr. Sarolea that “America is playing the part of Shylock, exacting its pound of flesh,” and concur in his opinion that “while America’s moneylenders have been objecting to Germany paying reparations to her victims, they have, with an amazing lack of consistency and moral sensibility, insisted that it is quite right Britain and France and their Allies should pay their ‘ debts to their American Allies, although those debts were incurred in the pursuit of a common cause.”