BURDEN OF DEBTS

Manawatu Standard, Volume LIII, Issue 6, 5 December 1932, Page 7

BURDEN OF DEBTS

ADVERSE EFFECT ON BUSINESS GREAT BRITAIN’S NOTE In "the course of a striking 1 speech at Sunderland, Mr Stanley Baldwin referred to the adverse effect the war debts are having on the nations of the world, stating that the British Note to the United States simply set forth the facts in temperate language. United States Press comment on the Note generally is that it puts the position in a clear and concise manner, and one New York journal states that “‘our best customer is not making foolish threats.”

WHAT AMERICA STANDS TO 1 SUFFER. MR BALD IVIN’S SPEECH. TEMPERATE STATEMENT OF FACTS. (United Press Association —By Electric Telegraph.—Copyright.) (British Official Wireless.) Received December 5, 10.40 a.m. RUGBY, Dec. 3. Mr Baldwin, speaking at Sunderland last night, said that the British Note to America was a statement absolutely accurate in the facts and temperate in the language. He added: “There is no party question in this. It is the deliberate view of every man in this country who is competent to form a judgment on tho matters to which that; Note refers. I have no doubt that the Americans' will give the most careful, and, so far as the Government is concei'ned, sympathetic consideration to the Note because they stand to suffer as much as we do, if not more, from the continuance of this particular form of payment. What makes me so glad is that, following on Lausanne and following on the Note, we shall have an international conference as soon as it can be convened in 1933 at which I hope these questions will be studied and probed with knowledge and sympathy. I hope the result of that conference be that to a great extent the whole world may be relieved of this particular form of payment which is intolerable for the business of the whole world, whether to the debtor or the creditor.”

a deep impression on a large section of American opinion, including many of those most in touch with the world economic situation, tho first reactions of several influential members of Congress slio'iy little or no departure from the attitude adopted by them during tho recent electoral campaign.

It is hoped that, when time Las been allowed for a more careful study of the tragic logic with which the British Note traces the history of the world depression, and the relation thereto of the vast unnatural transfers in a system of international indebtedness, together with the effect upon both creditor and debtor countries of its continuance, some recognition will.be forthcoming of tho real needs of tire world situation. For the time being, however, the messages from America give slight reasons to couple this hope with tho expectation. Apart from America, the British Note has been hailed in nearly every other country as both impressive and convincing.

CONTINENTAL VIEWS. LONDON, Dee. 3. Continental views on the British Note are summarised by the Daily Telegraph as follows: France regards it as a frank appeal to the American Government’s sense of realities, but fears that the hint of eventual payment will react unfavourably on France. It is admitted that, if British payments to America are resumed, Britain’s debtors are pledged to resume their contributions to Britain.

The first impression in Italy is that although the Note says nothing new it is a further step toward the treatment of reparations, debts and disarmament as one problem instead of three. This has long been the aim of Signor Mussolini.

REDUCTION IN WORLD TRADE. EFFECT ON ALL COUNTRIES., (British Official Wireless.) RUGBY, Dec. 3. By tracing the course of post-war finance, by setting forth the facts of the present situation, by pointing to the logical and inescapable sequel of maintaining unaltered the system of inter-governmental payments, the British Note demonstrates the responsibility of war debts in provoking and maintaing world-wide depression, and in reducing the volume of world trade, which has fallen off at the appalling rate of five million dollars an hour to only half wliat it was throe years ago. Tho effect of this is shown upon creditor as well as debtor countries, and the point is driven home by the marshalling of facts that a war debt settlement which reliei-ed the economic machinery of the world by clearing up these payments would be repaid again and again by the contribution it would make to world revenue.

Germany draws a parallel between the position of Britain and France and that of Germany in former days. They are described as using the same arguments employed by the Reich against the fantastic reparations demands.

STATESMAN’S CONFESSION. NO TIME TO READ NOTE. Received December 5, 10.15 a.m. WASHINGTON, Dec. 3. A prize story about the war debt negotiations developed to-day in a conversation which a representative of the Sun had with Senator Garner, Vice-President elect. The Sun man says: “This eminent Texas statesman retailed what he lmd said to President Hoover recently, adding: ‘I still think the same way.’ He then continued: ‘But, you know, I have not read this latest Note from Britain, 1 have not had time. I am too busy with beer.’

A report of the Secretary of the United States Treasury is cited which eight years ago declared that “no settlement which is oppressive and which retards recovery and the development of the foreign’ debtor is to the best interests of the United States or of Europe,”., and the Note observes' that in the present circumstances a resumption of war debt payments appears altogether inconsistent with the principle of the capacity to pay as there defined. UNNATURAL TRANSFERS. The fall in prices which has caused widespread ruin and disastrous social and political repercussions is traced to these “unnatural transfers” and tho effects upon the Lausanne settlement of maintaining the present system and of refusing suspension of the British war debt instalment due December 15 are clearly traced. It states that the “situation in which Britain was required to continue war debt payments while foregoing war debt payments due to it would bo admitted at once to be unthinkable.” The British Government would be obliged to reopen the questiqn of payments from their own debtors. The confidence which followed the Lausanne agreement would be undone and fatal results might well be found to have accrued to the solution of many grave as well as financial problems.

“Senator Garner in this matter has more power than the President. He will be the boss of Congress in the coming ‘lame duck’ session. Next year he will be Vice-President and the presiding officer in the Senate. One of the great documents in diplomatic history had passed and he would not take the trouble to read it. Yet lie was ready to jump into the front column of the American Press with a positive declaration that Congress was not going to change its mind about it.

“Congressmen repeatedly disclose that changing their minds is one of the best things they do. Senator Garner himself a few months ago was one of the most devoted believers in prohibition. People changed his mind for him. As a matter of fact, certain influential senators told me privately that the British position may with great propriety be reviewed, but none of them thought the December payment should be postponed,” concluded the Sun representative.

SENATOR’S PROPOSAL. REDUCING TRADE OBSTACLES. Received December 5, 10.15 a.m. WASHINGTON, Dec. 3. Senator Cordell Hull, a Democratic tariff expert from Tennessee, sent a proposal to President Hoover to-day that the. United States take the leadership in persuading the world Powers to cut tariffs 10 per cent, and mow down other artificial trade obstacles. If the nations accepted this programme, America could reduce the debt payments.

INTERNATIONAL OBLIGATIONS. (British Official Wireless.) RUGBY, Dec. 2. Mr Stanley Baldwin, speaking in Glasgow, made a short reference to the debt question in which he urged the British public to recognise that America was herself in a difficult position so far as action regarding this month’s payments are concerned, owing to the state of deadlock which existed following tho American election. Ho believed that the American attitude was most friendly toward Britain, but it was difficult for the moment politically and constitutionally for her to act. Referring to Lausanne, he said that Europe had recognised that it was impossible in the present world conditions to continue the payments that were hoing made across European exchanges in settlement of debts and reparations contracted during the war. The force of economic circumstances had been such that the people had realised that until those fetters had been removed from the necks of the nations of Europe it would lie impossible' to revert to that freer circulation of trade, commerce, and goods and facilitate payment for these things between countries.

SUGGESTION IN UNITED STATES. PAYMENT IN SILVER. WASHINGTON, Dec. 3. Several movements linked with the remonetisation of silver developed in the United States Senate on Saturday in connection with debt payments. Senator Somers, chairman of the Coinage Committee, suggested that Britain be allowed to pay the December instalment in silver. Senator Hayden followed this up with a suggestion that all war debts be paid in silver, and Senator Wheeler and others said that they believed that the remonetisation of silver was essential for economic recovery. Mr Somers said that the use of silver to pay war debts would increase its value, raise commodity prices and be the key to the solution of all future depressions l . Insistence upon British gold payment and the consequent further depreciation of sterling, he said, “will harm the United States probably more than Britain.” INSTALMENTS WILL BE MET. WASHINGTON, Dec. 3. The Administration is understood to be preparing for the resumption of war debt payments on December 15 nnd to be seeking a method of collection that would cause the least possible disturbance in international exchanges. The general impression here is that the British and French instalments will be met. President Hoover is expected to refer to the subject in a message to Congress next week with a* renewal of his appeal for the creation of a War Debt Commission, but with a firm stand against postponement. It is becoming plain that the United States wants some disarmament by European Powers before any programme of debt relief.

What was accomplished at Lausanne must bear gfeat weight at the tV’orld Conference and at what discussions might take place next year regarding the European debts to America. They might, however, feel that tho whole of Europe would enter into these discussions with the full sympathy of America that Europe had achieved unity in her conception ol how these problems should bo met and the lines along which they must' travel before any could see daylight again in the matter of international financial obligations.

TRAGIC LOGIC OF NOTE. IMPRESSIVE AND CONVINCING. (British Official Wireless.) Received December 5, 10.40 a.m. RUGBY, Dec. 3. Washington messages indicate the livelihood of President Hoover making the European debts question the subject of a special to Congress next week. Meanwhile the reports reaching London show that,, although the British Note has created

OBVIOUS FACTS. NO FOOLISH THREATS. NEW YORK, Dec. 3. Commenting on the British Note, the Journal of Commerce to-day said:—“No, our best customer is not engaged in making foolish threats. It is not trying needlessly to alarm the numerous exporting groups whose sales abroad will bo curtailed in proportion as the pound depreciates, it is only setting forth certain obvious facts which it is perilous for the people of the United States to ignore.” The Herald-Tribune says: “The Note conveys a sense of danger that not even the mort suspicious citizen from Missouri could miss. An easing of the December task that is feasible should certainly be granted, but far larger and more vital is the problem of final settlement.' The interest of this nation in seeing the pound sterling restored to its old position, and Britnin, our largest customer, share in a general return to prosperity, can hardly be over-estimated.” The Washington Star (Independent) says:—“lt is plainly and patently incumbent upon the American people to suppress their prejudices and weigh the British facts and figures not only upon their intrinsic merits, but primarily from the standpoint of wlfat is best in the long run for the United States.”

The Birmingham Age-Herald (Democrat) says:—“The Note is avowedly an effort to reach the mind and heart of the American people. The American love. for candour and capacity for catching a point must respond to such a petition.” The San Francisco Chronicle (Independent Republican) says that whatever the President may recommend now, or Mr Roosevelt may propose later, Congress has made up its mind, and its answer is “No.” “Most American economists agree that the British analysis is correct, but no American Congressman will learn that by mere economic argument.” The Boston Herald (Republican) says:—“lt is a notably comprehensive, forthright and persuasive document which Americans who have hitherto neglected to study the involved question of reparations, war debts, and economic implications, would do well to read in its entirety.” MORAL OBLIGATION. APPEAL W FRANCE. WASHINGTON, Dec. 2. Study and discussion of the British Debt Note to-day appeared only to solidify Congressional opposition to any change in the existing funding agreements. The French Note was published and, as anticipated, it emphasised that a moral obligation was placed on President Hoover to extend the moratorium principle. It described the French and the world economic situation as regarding a fundamental revision of the debts status. While admitting the powers of Congress, the Note closed significantly with an appeal for a favourable decision from the “President of the United States.” President Hoover and Cabinet were busy throughout the day discussing the situation. The British Ambassador called on the Secretary of State. No statement was made other than an intimation that neither Note might be officially answered. Meanwhile it is persistently rumoured that several Senators presumably leading Democrats, are formulating a long range programme, envisaging settling all debts for a fixed cash amount, tentatively mentioned as a billion dollars, to be financed by an international loan, granting the United States trade concessions, and substantial reductions in European armaments. It is understood that high Government officials are greatly concerned over the effect on world trade of further currency depreciations. They are studying this angle intensively.

RECORD LOW PRICE FOR SILVER. NEW YORK. Dec. 3. A new all-time low record for silver was established on Saturday at 24 7-8 cents per ounce, a drop of one eighth from Friday. The market has declined nearly two cents per ounce since the start of the week in sympathy with sterling. PRICE OF GOLD. "LONDON, Dec. 4. Gold is quoted at £6 9s 4Jd per ounce. Sterling on New York is 3.185.