AN ENCOURAGING GESTURE

Nelson Evening Mail, Volume LXVI, 3 September 1934, Page 4

AN ENCOURAGING GESTURE

FOLLOWING closely upon the decision of the Government of South Africa to repay to the British Government the remainder of its war debt, came last week end the British confirmation and notification of grateful acceptance. In these times of the moratorium or of default and repudiation this action on the part of South Africa is most striking and warrants again placing on record the terms of the Treasury announcement as cabled:

At the end of the war South Africa owed some £15,500,000 to this country in respect of the war debt,- which by 1931 had been reduced by repayments to £7,500,000. A sum of £337,500 is payable annually on account of interest on' the debt. When the suspension of the inter-governmental debt wits agreed upon, and arrangements were afterwards made at the Lausanne Conference, South Africa generously decided not to avail herself of the offer to suspend this war debt payment, and continued it regularly up to the present time. His Majesty’s Government in the Union has now expressed the desire to repay the whole debt outstanding, namely £7,500,000, on the 31st instant, and Ilis Majesty’s Government in the United Kingdom gratefully accepted the offer.

The incident is not only refreshing, but it serves to demonstrate the remarkable recovery of South Africa, and the continued buoyancy of its revenue, which is chiefly due to the high premium on gold. In the realm of agriculture the position has not greatly improved, although during the past two years the Government has expended a considerable amount in assisting agriculturists, mainly in productive schemes such as land settlement, irrigation, and in the prevention of soil erosion. Although conditions improved it was deemed necessary to maintain export subsidies. In the last financial statement the revenue was well ahead of the estimates, and after about two millions of accumulated defiicit had been wiped out, there remained a surplus of over four and a half millions which went to debt redemption and other public services. The Budget for the current year provided for a surplus of £2,800,000 more than tho £BOOO which New Zealand’s Minister of Finance anticipates showing in this Dominion. It was intended that tho South African surplus should bo devoted to taxation remissions, and tho indications are that anticipations of revenue will be exceeded. Exactly how the wiping off of tho war debt will affect the position has not yet been made clear. In June last the South African correspondent of the “Economist” summed up the position by saying that “bank deposits, savings bank deposits, Land Bank deposits, advances, building plans, general employment index, employees on relief work, motor-car purchases, and other figures all show evidence of recovery,” The outlook in our sister State is hopeful, reassuring and encouraging. Her liquidation of the balance of war debt is of healthy significance to the whole Empire, and a significance not likely to be overlooked by other nations. The amount of money concerned is small in comparison with general indebtedness, but the principle involved is great.