Manawatu Evening Standard. THURSDAY, DEC. 8, 1932. THE LEAGUE LOANS.

Manawatu Standard, Volume LIII, Issue 9, 8 December 1932, Page 6

Manawatu Evening Standard. THURSDAY, DEC. 8, 1932. THE LEAGUE LOANS.

Recently, the League of Nations Loans Committee in London addressed a memorial to the British Government, and to the Council of the League, drawing attention to the deplorable effect upon the influence of the League of Nations of the defaults which have occurred upon the League loans, and to the difficulty which such defaults inevitably place in the way of raising further loans for the purpose of reconstruction. The British . public have contributed very largely to these loans which are of a special nature. Their status was emphasised by the memorialists, who pointed out that, but for the reconstruction schemes to which they were applied, the service of any preWar debts could not have been renewed, and lenders would not have been found to invest their money in the countries to which these loans were made. The Loans Committee asked the British Government to request the League of Nations Council to take the necessary steps to restore confidence in these loans, and enable the League to continue its work of European reconstruction. The gravity of the position was realised by the Council, which appointed a committee of five delegates, under the chairmanship of M. Braadland (Norway), to examine the memorial. The Committee reported on October 7, two days after it was charged with the duty, and subsequently the Council adopted a resolution realising the special responsibility which lies upon it in connection with the League loans, and reaffirming the very grave concern with which it views the continued failure of _ certain States to meet their obligations thereunder. It _ requested the Financial Committee to give particular attention to the League’s responsibilities in this connection, and to advise whether any further remedial action could be taken at the present time. The opinion was also advanced that any country in default on a League loan should avail itself fully of the technical help of the League’s advisers, and should keep the Council informed of the position through its Financial Committee. Sir Austen Chamberlain,. who is chairman of the League Loans Committee, was present during the. discussion, and in subsequently expressing gratitude for the decision, emphasised the importance of the debtor countries using the machinery of the League which provides expert advice. The Committee, lie said, realised the difficulties of the debtor countries, and he hoped the negotiations would continue and lead to fruitful results. “The greater the good will shown by the debtor countries, the greater would be the readiness of the creditors to meet' their requirements.” The grave situation created by the default under these loans has been stressed in London on several occasions. “Of all the heavy shocks administered to the system of international credit by the events of the past two years,” the London Times has said, “the defaults I which have taken place on League loans are by far the heaviest, owing to the peculiarly solemn nature of the obligations entered into by the debtor countries, obligations which, in several instances, have been disre-

garded in a way which no plea of necessity can excuse.” But for these loans and the schemes of reconstruction for which they were raised, the economic life of the countries in default would have remained severely impaired, preventing business on an organised scale. The great assistance they have been makes default now all the more to be regretted, especially as certain revenues were assigned to the service of the loans. It is’ recognised that the debtor countries, owing to the collapse of world prices making the burden of obligations too great to bear, must receUe some measure of temporary relief, but they must show the good will of which Sir Austen| Chamberlain speaks. _ It is welS that the League realises the danger to its financial prestige ■until this grave matter is remedied.