BRITISH DEBTS

Manawatu Standard, Volume LII, Issue 307, 25 November 1932, Page 2

BRITISH DEBTS

3.45 P.M. EDITION

METHODS OF PAYMENT. SUGGESTED SHIPMENT OF GOLD (United Press Association —By. Electric Telegraph—Copyright.) Received November 25, 1.30 p.m. LONDON, Nov. 24. In the House of Commons several questions were put relating to the British debt to the United States, two suggesting the possibility of payment in gold. Mr Neville Chamberlain replied that lie was not in a position to make a statement on the subject. To the inquiries suggesting payment in gold lie said that all relevant matter would be considered. Sir Robert Horne, in the debate on the Address-in-Reply, referring to the debt payment to the United States due on December 15, said: “I have no doubt whatever that we ought to pay. For Britain to default after her extraordinary recovery iu the past year and, the prestige she has resumed in the economic world, would be a disaster not only for us, but for the whole credit structure of tho globe. How should we pay ? I have no doubt whatever; we should pay by

shipping a bar of gold. Sir Robert Horne added; "There are at present 140 millions of gold in the Bank of England. We have lived long enough off the gold standard to know that we need not be frightened at tho absence of some of this gold. In ordinary circumstances this loss of gold would lead to a reduction in the monetary circulation. This must not be allowed as great deflation, following the shipping of the gold, would be harmful to every interest. As Mr Chamberlain must shortly deal with the amount of the fiduciary issue, I hope steps will be taken to see that tho monetary circulation is in nowise lessened. The way to deal with this gold payment as a budgetary matter is to suspend the sinking fund to the extent of the payment. It would thus make no difference to the Budget figures and the sinking fund specially designed for the payment of the debt. Six months ago an objection might have been raised against such suspension on the ground that it would defer the conversion scheme. This difficulty is now cleared away. The next difficulty would be a fall in tho pound. It would cause me no anxiety if the pound fell further as it has not yet fallen as far as prices. If it fell to three dollars, or even below, it would still be a convenient medium of exchange. We should put the position, relying less on imports and more on our own manufactures.” While most of the purchases from the outside world could be made on a selling basis, the real trouble of tho American demand was the check to the steps towards a revival of prosperity which all the nations should have taken cooperatively. “We are in a strong position as tho centre of a great sterling area, representing half the world’s trade. We are the leading ship of the convoy, and I hope we have courage enough to take the action the leader of the ship demands to help the world out of the present troubles.’ ’

EFFECT OF INSISTENCE ON PAYMENT. RETARDING WORLD RECOVERY. Received November 25, 1.45 p.m. TORONTO, Nov. 24. “The insistence of the United States on payment can only retard for a longer period a world recovery,” declares Sir Thomas White. “The debts must eventually revise themselves as the burden is too heavy to be borne by international trade.”