Manawatu Evening Standard. TUESDAY, DEC. 20, 1932. WAR DEBT LIABILITY.

Manawatu Standard, Volume LIII, Issue 20, 20 December 1932, Page 6

Manawatu Evening Standard. TUESDAY, DEC. 20, 1932. WAR DEBT LIABILITY.

In expressing’ a readiness to resume payments under the war debt to the Mother Country, should it be the desire of the Home Government to review the position created by the resumption of payments by Britain to the United States, the New Zealand Government has acted with a fitting regard to all the circumstances. It is needless, almost, to say that members of Cabinet realise the severe and greater burden that will be cast upon this country should the oiler be accepted. When the Hoover Moratorium was assented to by the Powers in 1931, Britain generously extended the principle to the Dominions and New Zealand accepted the offer. Considerable relief was given to the Budget, and the period of suspension covered the half-yearly payments of £825,000 due on December 1, 1931, and June 1, 1932. A few months ago Great Britain again displayed consideration for this Dominion by really extending the moratorium for a further year. The precise statement in the Budget delivered on October 4 was as follows:—“Following Mr Downie Stewart’s personal representations in London in regard to our difficulties, Great Britain has again extended a helping hand by consenting to postpone for another year all payments due on our funded war debt and certain other debts due to the British Government. The additional relief to this year’s Budget is £825,000, in addition to which a saving of £47,000 will accrue to the State Advances Office. Our grateful thanks are due to the Mother Country for this substantial measure of assistance during the acute period of our troubles.’’ Since then, however, this country’s difficulties have become still more sharply accentuated, and grateful though she is for the Mother Country’s generosity, and knowing full well that the need for it is still more pressing-, New Zealand cannot honourably accept it if the _ British taxpayer must bear a still greater burden at her expense. She has therefore notified Britain that if the concession granted was based on the assumption of the United States continuing the moratorium, she feels in honour bound to reassume liability for payments under the debt. The Government should have the support of all right thinking people in the action it has taken. There are some no doubt who will object that, as Britain freely g-ave relief as explained in the Budget, the Government was not obliged to take action of its own volition. That is, however, an improper view. When Britain first extended the principle of the Hoover moratorium to the Dominions, it was officially stated that the cost to the British Budget would be £11,000,000. That was a heavy charge to add to Britain’s difficulties, but the Mother Country freely accepted the position. Now, however, she has—and it is the honourable course —chosen to pay the United States the principle and interest due on December 15, while receiving nothing from her own debtors. The depreciation of the pound sterling in terms of the dollar has made that payment a

terrific burden. There was no provision for it in the Budget Mr Neville Chamberlain submitted last April. The revenue was estimated at £766,800,000 and, after allowing for Budgeted expenditure, it was hoped to provide a surplus of £796,000. The estimated revenue did not contain any item from Britain’s debtors, the Chancellor stating that these had been deferred until after the Lausanne Conference. Since then, however, chiefly because of the uncertainty ,which had prevailed in regard to the United States’s attitude, nothing had been done about the items which Britain had been entitled to count as revenue. Now she has been compelled to find about £30,000,000 in sterling which represents the dollar value of the debt payment. The tremendous burden .that will be cast upon this year’s Budget in Britain should be patent to all. New Zealand, to help the Mother Country, has offered to reassume liability for payments and, assuming that the Mother Country’s assistance covered the next financial year also, the sum which this Dominion is prepared to pay is nearly £1,600,000 divided between this and the next financial year.