BRITISH LIABILITY.

Manawatu Standard, Volume XLVI, Issue 200, 24 July 1926, Page 9

BRITISH LIABILITY.

DEBT TO AMERICA. ATTITUDE OF”TREASURY. REPLY BY MR CHURCHILL. LONDON, July 22. Mr W. S. Churchill, Chancellor o! the Exchequer, in a statement in reply to the American Treasury’s attitude towards the British - debt to America, says: “In no way can discrimination against Britain be based on her use of the money borrowed from the United States for the prosecution of the war. Britain has not complained of the adverse discrimination with which she has been treated, but, when the discriminatton arises from a misconception of the facts, the necessary corrections must be made. “In any ease, the fact remains that British purchases of American munitions, footstuffs, etc., essential for the prosecution of the war largely exceed the amount Britain borrowed from the United States. It is quite time that a large part of the British borrowings were - spent on the purchase of foodstuffs for the civil population, but obviously supplies for civilians constituted essential war requirements, as food for workmen. IndisEutable facts are that the money was orrowed by Britain and spent in the United States on United States commodities for purposes approved by the United States Treasury, and in accordance with United States statutes, for the prosecution of the war. Britain provided sterling for neutral currencies to meet her own requirements in war time, and also bore the burden of covering the sterling requirements of her Continental Allies. Had not the United States when entering the war felt unable to relieve Britain of the latter portion of the burden, Britain could have met her expenditure in America from resources placed at the disposal of her Allies, and there was all human possibility that the British' debt to America would never have been incurred.” “It is difficult to understand why the British Treasury’s sales of sterling and rupees should be included among British expenditures in the _ United States, seeing that these oonstitilted a portion of Britain’s independent resources. Such expenditure essentially constituted a purchase of exchange for sterling, and must clearly be regarded as independent resources. “When the American Treasury al- ! ludes to 1863 million dollars obtained from our European Allies as a reimbursement, it is forgotten that Britain could have obtained many of her requirements from the British Dominions and elsewhere, but arranged for the Allies to obtain them from such sources, while Britain obtained the same from America. While the Allies repaid Britain a considerable proportion of this expenditure, a large proportion of it was still included m Britain’s debt to America. Mr Churchill concluded: “A debtor is bound to comply with tho demands of a creditor.” He recalls that Britain after the armistice paid America £40,000,000 off the principal df the debt, also £58,000,000 off the war debt , interest, but the American Treasury s ' statement does not mention the f act. • A. and N.Z. cable.