Nelson Evening Mail FRIDAY, FEBRUARY 10, 1933 DEALING WITH AMERICA

Nelson Evening Mail, Volume LXVI, 10 February 1933, Page 4

Nelson Evening Mail FRIDAY, FEBRUARY 10, 1933 DEALING WITH AMERICA

A CABLEGRAM from Washington received yesterday, and dated the Bth inst., said: — Senator Borah to-day threw his influence against a lump sum cash settlement of European war debts, or any other settlement that embraces no trade concessions for the United States. Senator Borah said, “ . . A lump sum payment would not do us any good of a permanent nature unless we can find markets to restore the pur-

chasing power of the people.” It is ten or twelve years since Mr Stanley Baldwin went to the United States for the purpose of making a debt-settle-ment on behalf of the British Government, and it was arranged that the debt should be funded; that is to say that it should be paid by annual instalments of principal and interest graduated in such a manner that the debt, together with interest upon it, should be paid after the lapse of some sixty years. It is a well-known method of debtsettlement, and is used in connection with the repayment of monies lent to settlers by the Government of this country ; and it naturally includes the right of the debtor to pay at -any time by means of a lump sum the balance of the principal owing by him. Thus, the British Government, in respect of its war debt to America, has been paying yearly instalments of principal and interest, but if at any time it offers to pay in a! lump sum the balance of the principal money, the United States would appear to have no option but to accept such payment in full clearance of the debt. Senator Borah seems to imagine that his Government could refuse such payment, unless it were accompanied by an agreement on the part of the British Government to make valuable trade concessions to the United States. In other words, he would not only insist upon receiving his pound of flesh with interest, but demands that he shall have the right to rifle his victim’s house. From the point of view of tile commercial moralist, Senator Borah’s proposal is something very like highway robbery. Ho would not merely insist on all that is contained in the bond, but ho would read into that bond an additional obligation binding Britain to extend valuable trade concessions to the Americans in consideration of her (Britain’s) indebtedness. Evidently he wants to make it as difficult as possible for Britain to settle her debt, because he desires to fasten upon her an obligation to increase her annual purchases of United States’ produce.

The desire of the British Government is to solve the problem of debt settlement, before the holding of the proposed World • Economic Conference, so that it may deal there with the American Government on an equal footing in respect of reciprocal trade concessions. It has been suggested that, in order to avoid the high rate of exchange, the British Government should borrow the necessary money on the American market, pay the U.S. Government in full, and so avoid the predicament outlined by Senator Borah. So it has been arranged for a British delegation, led possibly by the British Premier, to go to the United States with a view to carrying through a settlement of the debt, on the lines indicated, and it would appear that it was the intimation that such a delegation will sail which elicited from Senator Borali the extraordinary expressions, above quoted. That politician’s aim would seem to be to take advantage of Britain’s indebtedness, in order to chain her permanently to America’s chariot-wheel by means of a trade agreement which would give American goods preferential treatment in the British market, while the American market would he as closely barred as ever against British goods. If Senator Borah voices the sentiments of the American Congress there is not much chance of the British delegation succeeding, when it goes to America. Furthermore, it is generally recognised that if the question of the debt is not previously settled by Britain and America, there will not he much chance of their agreement at the proposed World Economic Conference, which, without their united assistance and hearty co-operation, would probably fail.'