DEBT INCUBUS

Northern Advocate, 7 June 1933, Page 5

DEBT INCUBUS

DUES TO AMERICA SHOULD BRITAIN DEFAULT? LORD SNOWDEN’S OPINION. A. DANGEROUS PRECEDENT. (United Press Association —By Electric Telegraph.—Copyright.) (Received 9 a.m.) LONDON, June 6.

The British Cabinet is expecting a communication respecting war debts from the United States within 48 hours. Ministers may be summoned on Friday,, r At least five nations —Hungary, Ron - mania, Yugoslavia, Austria and Greece —already have decided against paying America, and others are almost certain

to take their cue from Britain and

France.

Viscount Snowden, in an article in the “Daily Mail,” declares that the United States, which might have graci-. •• ously permitted a moratorium during the World Economic Conference, is res- - ponsible for the- impossibility of revis- • ing the American debt terms before the ; June payments are due. He asks: ' “Should Britain default? Lord Snowden continues:. “Wide- ~ spread opinions favours default, since the two 1933 instalments will result in a Budget deficit of £48,000,000. The. ■ interest of the debt has increased from--3 per cent to 31 per cent. We must • begin to repay the sum suspended under the Hoover moratorium on July 1.

“Some contend that war debts de fault should not be discreditable,- in , view of America’s repudiation of her obligations to pay her debts in gold. \ Nevertheless, it is more dangerous for." Britain than for any other country to repudiate her bonds. Britons are the world’s greatest creditors of foreign "J countries, who would need little en- * couragement to follow Britain’s example, and repudiate their debts to her. ' “Default might drive America frofh -■ the Economic Conference. The weight ~ of argument heavily favours payment, which can be made in silver at a cost of £12,000,000, and Britain’s honour is ~ worth that amount, especially as the payments probably will be the last ..required" under the existing agreement. ,y;: The “Daily Mail,” in a icadihgartiele, dissents from Lord Snowden’s verdict. It contends that there is nothing to prove that America will relieve Britain of future payments, and! reiterates the argument in favour of token payment, thus avoiding imposing the burden of £48,000,000 on the British' ’ taxpayer. -