WAR DEBTS

Manawatu Standard, Volume LII, Issue 307, 25 November 1932, Page 7

WAR DEBTS

REPLY REACHES LONDON. TERMS NOT YET DIVULGED. SUSPENSION NOT RULED OUT. (United Press Association—By Electric Telegraph.—Copyright.) (British Official Wireless.) Received November 25, 12.17 a.m. RUGBY, Nov.'24. The reply of the United States Government to the recent British Note on war debts has reached London, but the terms of the reply have not yet been published. However, the views of President Hoover were publicly expressed in the statement issued at Washington. This declares that the debt agreement must be maintained in its full integrity, except as adjusted by. mutual consent. The discussion, he said, would proceed under more favourable circumstances if the terms of the debt obligations were carried out father than suspended prior to a discussion.

When the terms of the American reply' have been fuily considered by Cabinet littie time will be lost in forwarding a further communication to America.

In authoritative circles the possibility of a suspension of payments is not entirely' ruied out of account. Mr Hoover’s observation that no facts had as yet been advanced by' the debtor countries to justify suspension of the payments due on December 15, pending the outcome of negotiations on the whole debt question, is recognised as accurate. There can be little doubt that the British Government will despatch a further Note to the United States explaining the reasons which prompted them to make the proposal and thus follow the same procedure as was adopted by the creditor powers at the Lausanne Conference.

Facts in support of the caso for a suspension are abundant—the fluctuations in exchanges and the general disturbances of confidence which accompany tho movement of large capital sums, of only two of which _the world has had recent experience, the desire of the United States for negotiations with each debtor country separately has always been imderstood. The British Government have already expressed their willingness to comply. Tho appropriate departments in London are giving careful consideration to the United States Government’s reply. CHANCELLOR RETICENT.

In the House of Commons Mr Neville Chamberlain, Chancellor of the Exchequer, refused to make a further statement on the position. The American reply has not yet gone before Cabinet.

PUSHING THE DOOR OPEN. MR ROOSEVELFS ATTITUDE. TREATING WITH INDIVIDUAL NATIONS. WASHINGTON, Nov. 23. “The President-elect, Mr F. D. Roosevelt, is cautiously pushing the door open toward war-debt revision.” This was the most important conclusion of observers who followed the twoday period of multifarious inter-party conferences at Washington, conferences, however, which in general added to the confusion existing in the American mind relative to the settlement of tho knotty question on a basis of intelligent self-interest, if not generosity. A statement which Mr Roosevelt issued from his train to-night on route to Georgia for a rest, indicating that he disagreed with President Hoover’s conclusions, • principally on the matter of re-creation of the Debt Commission, preferring to treat with each nation separately through diplomatic channels, has created a favourable impression among those seeking leniency tor debtor nations. The lack of a clear-cut, definitely-outlined golicy on the part of Mr Roosevelt, owever, is not considered surprising. Mr J. N. Garner, Speaker of the House, touched the nerve of the matter in a statement to-night, when he said: “One hundred and fifty new members of Congress have been elected. Who can tell what will be their minds ?”

Even as the principal conferences at Washington concluded, the representative of the Polish Government handed to the State Department a Note also asking for postponement and revision of its debt. It was rather an anti-climax for the Secretary of State, Mr H. L. Stimson, who was handing a reply to France almost simultaneously and similar replies were being drafted for other nations, virtually presenting President Hoover’s conclusions. PRESIDENT’S MODIFICATION. The President’s modification of his known opposition to suspension of the payments due on December 15 by suggesting that they might be made in foreign currency with transfers delayed is generally considered as especially applicable to Britain. With half the world stabilised to sterling., there is deep anxiety here lest a forced payment by Britain at this time might depress "the pound to the point of demoralisation of foreign commerce. Although Congressional leaders at to-day’s conference unanimously opposed suspension of the December 15 payments, they indicated that Congress, which is being convened for December 5, would probably not oppose payments in foreign currencies.

NEW BRITISH NOTE EXPECTED. An intimation from London that the British Government did not believe the door irrevocably closed against further Anglo-American discussion on the advisability of postponement of war debt payments has been sympathetically received in Washington.

It is expected that the new British Note will inform President Hoover in detail of the conditions necessitating a postponement and the presentation of the facts of the question will open immediately after the old Congress reconvenes for its last session. Senator Reed expressed the opinion that the President could conduct conversations with any debtor nations without Congressional action, but Mr Hoover pointed out that a rider to the Congressional approval of last year’s moratorium virtually tied the executive’s hands in this direction. There is considerable comment • on the apparent broadening of the President’s views, on the debt question as outlined in liis statement, particularly his suggestion for interlocking membership between the re-created Debt Commission and the American delegations to the World Economic Conference and the Armament Conference. SHARP CONTRAST OF VIEWS. Mr Roosevelt’s intimated opposition to discussion of debts at the latter two conferences is held to contrast sharply with the President’s view. The past week’s discussion throughout the nation on the war debts question has brought forth observations from many well-informed quarters

which contrast interestingly with statements in President Hoover’s pronouncements. Although there is no legal connection between debts and reparations it is felt that the attempt to keep them apart is only a quibble, since the Dawes and Young Plans were both drawn up with American debt payments in mind, and the war debt payments have hitherto been made froni reparations payments. MONEY FOR ARMAMENTS. Suggestions or inferences that Europe’s ability to pay is demonstrated by its increased armament expenditures are considered open to qualification and examination. United States appropriations for defence have increased more than those of any other country. Expenditure for defence, furthermore, does not represent exported capital which debt payments require and which foreign countries find it extremely difficult to make. EFFECT OF CANCELLATION. It is estimated that if the payments due in the present fiscal year are cancelled it will only increase the par capita tax burden 2 dollars 20 cents, compared with the approximately 4 dollars 15 cents, per capita decline in United States Customs revenue during the past two years, due to the drop in foreign trade, which is in no small part attributable to war debt inequalities. AMERICAN TRESS VIEWS. The Boston Herald says: “A great nation cannot properly act otherwise than as an open-minded magnanimous creditor.” The Baltimore Sun says that the outcome of the Hoover-Roosevelt conversations on war debts “is more fiddling and more suffering.” Tho New York Times declares: “Unless in this hour the English-speak. ing nations of the world stand together new dangers lie ahead. We must do our part particularly in our attitude toward the nation which has shown gallantry and fortitude with its own titanic problems and high consideration for our own political difficulties and economic burdens.” The New York Herald-Tribune says: ‘Americans are so accustomed to having Mr lioover do the right and courageous thing that his admirable statements on debts will hardly occasion much surprise.”

PRESIDENT-ELECT’S POLICY. DEBTOR’S ACCESS’TO CREDITOR. ATLANTA (Georgia), Nov. 23. In a statement issued while on his way here the President-elect, Mr Roosevelt, said that the debtor nations could make the most and effective contacts with the United States Government through the existing agencies of diplomatic intercourse.

“With regard to general policy in connection with these debts,” he said, “1 fimly believe that the individual debtor should at all times have access to the creditor and should have an opportunity to lay facts and representations before the creditor; also that the creditor always should give courteous, sympathetic and thoughtful consideration to such facts and representations.” He added that this principle applied to nations as well as to individuals.

FURTHER BRITISH NOTE. SUPPORT FOR DEBTOR’S CASE. POSITION REGARDED AS STILL OPEN. LONDON, Nov. 24. President Hoover’s statement is not regarded in British Government circles as unsatisfactory. It is realised that the door is not closed to further discussion, and it is understood that a further Note will be prepared and dispatched immediately giving facts and figures supporting tlie British case. The position is regarded as open until this document has been considered at Washington. It will be necessary that the Washington Government should consider the international effects of the transfer of £28,000,000 across the Atlantic, while the British Government must study the reaction of such a transaction on the financial position here, seeing that provision for the payment was not made in the last Budget. “OUTLOOK NOT FAVOURABLE.” The Times says: ‘ ‘lt is clear that the decisive word rests with Congress, and the outlook is not at present favourable. If America insists on payment on December 15 it goes almost without saying that payment will be made. Any other course, supposing that payment is humanly possible, would be contrary to the British tradition, and would deaL a fatal blow to the quaking edifice of international credit. If Great Britain were to repudiate her obligations her example would be followed by every debtor country, and possibly even by private debtors.” The editorial proceeds to recount the consequences- of the sacrifices entailed if payment must be made, affecting the British taxpayer, the taxpayer of the Empire, and of America herself, besides the Lausanne settlement.

CHANCELLOR’S CONFIDENCE.

(British Official Wireless.) RUGBY, Nov. 23. In the course of his important statement on the British request to the United States for a provisional suspension of war debt payments pending a discussion, the Chancellor of the Exchequer, Mr-Neville Chamberlain, said: “I have heard it’suggested that there is a further reason for the recent weakness of sterling, namely, the uncertainty abo’ut the outcome of our communication to the Government of the United States in respect to the instalment of the British war debt, amounting to about £2B million at the present rates. I cannot see there is anyground for anxiety- or fear on that account.”

STERLING FALLS HEAVILY. NEW LOW RECORD. LONDON, Nov. 24. Following President Hoover’s announcement excitement ran high in the foreign exchange market. Sterling was offered heavily, falling to 824£ cents compared with 323 J, the lowest ever recorded since Britain left the gold standard. The Stock Exchange opened weak, gilt-edgeds being f per cent, lower. THE PRICE OF GOLD. Received November 25, 9.20 a.m. LONDON, Nov. 24. Gold is quoted at £6 6s lOd per fine ounce.