Manawatu Daily Times Empire War Debts

Manawatu Times, Volume LIV, Issue 6627, 14 August 1931, Page 6

Manawatu Daily Times Empire War Debts

The statement by Mr. Philip Snowden, Chancellor of the Exchequer, that a loss of £11,000,000 to the British Budget for the current year was involved by the extension to the Dominions of President Hoover’s proposals was subsequently explained in an official memorandum. It stated that in the present financial year the payments due on the debt to the United States Government amount to £32,864,000. The receipts from reparations and from war loans to Allies allowed for m the Budget were: —From reparations, £15,800,000, and from war loans to Allies, £17,750,000; together, £33,550,000. The following sums allowed for in the Budget are also affected by the proposals:—From Dominion and Colonial war loans, £6,870,000; from Indian war contribution, £836,600; and from loans for reconstruction relief, repatriation, and stores, £2,273,000. The full total was £43,529,000. A sum of £814,000 in respect of a sinking fund payment on the Australian war debt had already been excluded from the Budget estimate of receipts.

“The effect on the present financial year of the new proposals is complicated by the fact that they would take effect from July 1 and not from April 1,” Mr Snowden added. “We have already received £13,033,000 of the £43,529,000 due to us under the various heads indicated, and have already paid £13,555,000 of the £32,864,000 due to the United States Government. If full advantage had been taken of the offer made by His Majesty’s Government in the United Kingdom the loss 1o the present financial year would have been £11,187,000 and there would be a small gain to next financial year. These figures will require amendment to the extent to which any Government does not desire to take advantage of the offer. The generous response made by His Majesty's Government in South Africa will improve our position by £169,000 in this financial year and again in next financial year.”

The effect upon New Zealand of the suspension offer is more fully explained by the Treasury reports accompanying the Financial Statement. In the first place, it is made clear that Mr. Snowden’s proposal applies to war loans only. The New Zealand funded debt to the British Government includes obligations arising out of civil debts which matured during the war and were then taken over by the British Government. They amounted originally to £1,191,919 and at March 31 last had been reduced to £795,962. The annual charge in respect of these debts is £71,516 and it will be paid without remission.

The actual war debts were originally £26,340,245 and at March 31 the outstanding principal was £23,525,272. 'The annual charge, including interest and reduction of principal, is £1,580,414, this being the sum of which payment for one year is to be postponed. As the half-yearly instalments are payable on June 1 and December 1, and the moratorium operates from July 1, the actual relief to the New Zealand Budget should have been £790,207 this year and again next year. Apparently the instalment paid in June was not quite half the annual amount, so that the real relief this year is £795,000, according to the Prime Minister’s statement in the Budgtt. Receipts on reparation account before the announcement of the Hoover proposals were £85,000 and this sum is to be applied toward the statutory provision for the repayment of the public debt, reducing the charge on the Budget to £1,203,298.