MONEY SPENT ON WAR

Manawatu Standard, Volume LIII, Issue 15, 15 December 1932, Page 7

MONEY SPENT ON WAR

FUNDS FROM UNITED STATES

NON-PRODUCTIVE EXPENDITURE

IMPRESSIVE STATEMENT

(United Press Association. —By Electric Telegraph.—Copyright.)

(British Official Wireless.) Received December 15, 11.30 a.m. RUGBY, Dec. 14. The debate in the House of Commons on the American war debt payment opened with an impressive statement by Mr Neville Chamberlain, Chancellor of the Exchequer, who said that only by examining l the whole history of this affair was it possible to realise how strong 1 was Britain’s claim to a revision, how consistently and persistently successive British Governments had urged cancellation of the reparations and the war debts, how reluctantly other countries had accepted that view and how steadily they had been forced by hard facts and bitter experiences to come closer and closer to the viewpoint orig-inally expressed by the British Government.

All our war debt to America had been incurred after the United States entered the war, and it was entirely expended for the purposes of the war on goods purchased in the United States. Whether spent on munitions blown to pieces in Flanders, or on food consumed by the people and the soldiers, or on uniforms worn to rags in the war, the whole expenditure was just as non-productive as if spent on tanks, artillery or ships.

SUCCESSES AT LAUSANNE. Mr Chamberlain added that very early after the war the British Government came to the conclusion that the payment of great inter-governmen-tal obligations would postpone an economic recovery. He outlined at length the debt and reparations negotiations from 1920 onwards, and continued: “Owing to the remarkable change in European public opinion, it was possible to achieve at Lausanne success far more complete than was anticipated. The effect was to put an end to the existing system of reparations because the maximum liability in respect to reparations is now only £150,000,000 instead of £2,600,000,000 as under the Young Plan, but the Lausanne settlement was only provisional, whereas if the United States had been willing to send representatives to Lausanne we could make a final settlement on the spot.”. EFFECT OF DEFAULT. “In diplomatic circles,” said Mr Chamberlain, “we were given to understand that cash, and cash only, would content members of Congress. If we had declined to pay, it would have been equivalent to default, and default by the British Government for a sum which we could not say we were unable to pay would have resounded around the world and might have been taken as justification lor other defaults in other circumstances. “As a second alternative we might have asked that the required notice for the postponement of the principal be waived, but after requests for suspension of the whole payment, based on very wide consideration, has been refused, it would not have been dignified to make a plea in forma pauperis, and might have prejudiced the final settlement. BRITAIN’S DECISION.

through the Bank of England and the Federal Reserve Bank whereby the British payment of 95,550,000 dollars in gold will to-morrow be at the disposal in New York of the United States Treasury. It is believed that no furthor communication is likely regarding this payment.

EXPLANATION OF POSITION. WASHINGTON, Dec. 13. Britain’s new Note was received today. President Hoover immediately indicated that he interpreted its meaning as reserving the right to decide later on what basis payment will be accepted. Mr Stimson said: “The negotiations with the British Government are dosed so far as concern the December 15 payment. I do not anticipate -that a reply will be necessary to to-day’s Note.”

The British Note explained that the Government in Sunday’s Note had intended to explain the circumstances under which it was decided to make payment, and had. not intended to “touch upon any matter affecting the constitutional position of the United States,” but asserted that Britain “must reserve the right to revert” to those considerations which she set forth.

There is no quarrel here with this aim. The Administration does not believe that the claim later to be made will prove a complicated one, because so many larger questions will be at issue in a revision.

The negotiations are now generally regarded as a matter, so far as Britain is concerned, in the hands of the Pre-sident-elect, Mr F. D. Roosevelt. It is not believed that negotiations for revision can possibly be started before March 4.

President Hoover is preparing a special Note to Congress on foreign affairs, and is now awaiting possible defaults. He is ignoring M. Herriot’s attacks in the French Chamber of Deputies, apparently considering that they were uttered more for local consumption in France than for foreign ears.

“Therefore we decided on a third alternative —to pay in full. To have paid in full and said nothing would necessarily have taken the payment" out of the purview of the final revision of the debt and would have obliged us at once to inform our Allies that we expected them- to make a corresponding payment to us in respect to their debts. The mischief would not have stopped there because the Allies would necessarily have passed on their request to Germany to begin again the payment of reparations. “Therefore, it is considered necessary to intimate our intention when discussing the final settlement to put forward our contentions that the old regime interrupted by the Hoover moratorium can never be revived. DEBTORS AND CREDITORS. “If in the final settlement some reduced capital sum should be fixed, our debtors must still discuss with us on what terms and to what extent we will be prepared to remit their debts. Our position will remain where it was at the time of the Balfour Note. We shall not ask of our debtors more than we are called upon to pay our creditors, but they can hardly expect us to be content with less.” IMPORTANCE TO WORLD.

It is conceded that the possibility of default by other countries besides Belgium would break the “united front,” but would not contribute to easy approach to the problem of revision.

Meanwhile officials express considerable concern at the decision of the Belgian Cabinet to make default, and admit that the fall of the Herriot Cabinet in France will further complicate the situation. Routine Debt Note answers have been delivered to the Belgian Ambassador and the Czecho Slovakian Minister. They used the same phraseology, and denied a suspension of current payments. AMERICAN ATTITUDE. PAY OR DEFAULT. Received December 15, 8.40 a.m. WASHINGTON, Dec. 14. Disappointed and confused by the French insistence on a conference, the United States Government to-day nevertheless held firmly to its attitude toward Europe on the war debts—pay or default. But underneath the official Washington ran a current of suppressed excitement. Inasmuch as the United States Government considers it spoke plainly in its replies to every request for a moratorium extension, the indications were that White House and the State Department would keep silent until to-morrow, the date when the payments aro due. Should France, Belgium and the other nations default, the President may propose a new study , of the debt question as he has indicated. Congress alone can alter the existing agreements. OPINION OF MEMBERS OF CONGRESS. Expressions of indignation came from members of Congress. Senator McKellar said: “It is clear that Germany is not the only European nation that treats its obligations as scraps of paper. 1 think it is the most ungrateful act in the career of any nation in the world.”

Concluding, he said that payment would be made in gold in New York on the 15th. As to the Budget, he proposed to deal with the deficit by adjustments partly to lower rates of interest for Treasury bills and partly to funds provided by sinking funds which were no longer required by the State owing to the rise of gilt-edged securities. All were desirous of making a final and satisfactory settlement with the United States in the interests, not only of the two countries but of the world. It was equally important to save the Lausanne settlement. It w r as only by a policy of sincerity and loyalty that we could hope to obtain the co-opera-tion of the other nations in securing the prosperity of the world.

LABOUR FAVOURS CANCELLATION. WAR DEBTS AND REPARATIONS. Received December 15, 11.55 a.m. LONDON, Dec. 14. In the House of Commons Sir S'. Cripps (Labour) said that he believed and had always believed in complete cancellation of the war debts and reparations. Ho hoped the American people realised that there must bo cancellation if civilisation, trade and industry were to continue. Labour agreed with the Government’s action in making the present payment as it had no time to make arrangements with the United, States. If the Government had more actively pushed disarmament at Geneva and settled the ridiculous dispute in Ireland, it would have improved the chances of AngloAmerican negotiations in which it might eventually be necessary to reverse some of the Ottawa decisions. ARRANGEMENTS FOR PAYMENT. MONEY AT DISPOSAL OF UNITED STATES. (British Official Wireless.) RUGBY, Dec. 14. Arrangements have been completed

Mr Mcßeynolds, chairman of the House Foreign Alfairs Committee, said: France has less excuse not to pay than any other nation. The settlement made with her was only 75 per cent, of what she received after the war. There is no question about France’s ability to pay. 1 admire very much the strenuous fight made by M. Herriot. but apparently the Opposition ran wild.” • Senator McNary, the Assistant Republican Leader, said: “1 cannot foresee what we may be up against.” Senator Bingham said he had not supposed the French, whose business sense is so acute, would default. “They forget that had we been unwilling to loan the money they needed when they needed it, and on reasonable terms, the result would have been fatal to France.”

PRAISE FOR BRITAIN. NEW YORK, Dec. 14. The New York Herald-Tribune, in a leader, praises Britain’s latest Note.

“The long debate with Britain is over and payment ended in a fashion which we are confident will in the long run count heavily for mutual understanding and friendship between the two great English-speaking nations,” it says. “We welcome it and congratulate the spokesmen of both Governments. The result is that English credit stands in American eyes at the high point which has been its tradition and boast. The consequence in this country, in our opinion, is that sentiment will be strong for leniency and generosity toward a debtor so careful of its honour.” MR ROOSEVELT DENIES A REPORT.

In Albany, Mr Roosevelt took occasion categorically to deny a reported interview with the London Daily Express, saying he would urge the waiving of interest on the debt when he was inaugurated as President. He denounced the interview as “made out of white cloth” and said it was very embarrassing. PRICE OF GOLD. Received December 15, 10.15 a.m. LONDON, Dec. 14. Gold is quoted at £6 5s 6d per fine

Yesterday’s quotation was £6 6s 5d

FOREIGN EXCHANGES,

(British Official Wireless.) Received December 15, 11.30 a.m. RUGBY, Dec. 14. Foreign exchange rates ruling in London this morning were as follow: — New York, 3,28$ against 3.27$ overnight; Paris, 84$ against 83$ overnight.

REPARATIONS AND WAR DEBTS. RECEIPTS AND PAYMENTS. The net result of the cash payment of reparations and war Joans is that the United States has received £451,000,000, France £163,300,000, Belgium £118,800,000. Great Britain has paid £133,700,000 more than she has received. The table of receipts, whether from reparations or war loans by the various Allied and Associated Powers, and their payments in the form of war debts, together with the net result of those payments, compiled from the Economist, is given below. The conversions from the various currencies have been made at the par exchange. RECEIPTS AND PAYMENTS OF ALLIED AND ASSOCIATED POWERS TO JUNE 50th, 1931.

# Dcficit. THIS MONTH’S PAYMENTS. Payments to be made to the United States on December 15 in terms of the sovereign are given in the following table. If no further arrangement is made the payments set against the years following 1933 are those which will be made. The second column gives the payments to be made by all countries, and the third, fourth, and fifth, columns the payments to be made by Britain, France, and Italy respectively. These payments are included in the amounts set down in the second column. Conversion has been made from dollars at the par of exchange, roughly: TOTAL PAYMENTS TO UNITED STATES. 1933-1937. All

* Half year. GERMANY’S POSITION. Germany will presumably make payments to the Allied and Associated Powers for nine months ended March 31st, 1933, and thereafter as set forth in the Young Plan. The amounts are given below: GERMANY’S YOUNG PLAN SCHEDULE. PAYMENTS, 1933-1939.

+ Six months. From these figures some idea may be gained of the manner in which insistence on payment will affect the present year’s accounts of the different countries and future Budgets to June 30, 1937.

l’ayRoccipts. moots. Surplus £1000. £1000. £1000. United States .. ... 451,000 — 451,100 Groat Britain .. .. 192.500 326.200 *133,700 Franco .. 274.300 111,000 163,300 Italy .. 60,200 32,200 28,000 Belgium .. 126,300 7.500 118,800 Jugoslavia 1,500 35,000 Roumania 5,800 1,800 4,000 Portugal 4,010 1.500 2,510 Greeco 3,100 1,700 1,400 Japan 4,010 — 4,010

Year countries. Britain. Franco. Italy. ended £ £ £ £ June 30. 1933* 38.0 16.4 6.0 1.4 1934 59.0 36.5 15.0 3.0 1935 60.0 36.3 16.0 3.1 1936 62.5 36.1 18.0 3.2 1937 65.5 36.7 20.0 3.3

Year ended All British countries. Empire. France. £ £ ,,.„. £ Italv. £ 1933+ . 41.5 9.1 21.9 4.2 1934 87.2 22.7 43.9 9.6 1935 90.3 22.5 47 9.6 1936 91.6 22.2 48.1 9.7 1937 . 94.0 21.9 50.2 9.8