DEBTS OF THE WAR.

New Zealand Herald, Volume LXIII, Issue 19388, 24 July 1926, Page 11

DEBTS OF THE WAR.

BRITAIN AND AMERICA. PURPOSE OF THE BORROWING SPENT IN LENDER'S COUNTRY. USE OF FURTHER RESOURCES. By Telegraph—Pres3 Association—Copyright. (Received 5.5 p.m.) A. and N.Z. LONDON, July 22. The attitude of Britain regarding Britain's war debt to the United States is explained by 'the Chancellor of the Exchequer, Mr. Winston Churchill, in reply to a statement on the subject made on behalf of the United States Treasury. Mr. Churchill says: "In no way can discrimination against Britain be based on her use of the money borrowed from the United States for the prosecution of the war. Britain has not complained of tho adverse discrimination with which sho hiks been treated, but, when discrimination arises from a misconception of the facts, necessary corrections must bo made. "It is difficult to understand why the British Treasury's sales of sterling and rupees should be included among British expenditures in the United States, seeing that these constituted a portion . of Britain's independent resources. Such expenditures essentially constituted ihe purchase of exchange for sterling, and must be clearly regarded as independent resources. How America Benefited. "When the American Treasury alludes to 1853 million dollars obtained from the European Allies as a reimbursement, it is forgetting that Britain could have obtained many of her requirements from the British Dominions and elsewhere, but she arranged for the Allies to obtain goods from such sources, ..while Britain obtained supplies from America. While the Allies have repaid Britain a considerable proportion of such expenditure, a large proportion of it is still included in Britain's debt to America. "In any case, the fact remains that British purchases of American munitions, foodstuffs, etc., were essential for the prosecution of the war. They largely exceed the amount Britain borrowed from the United States. "It is quite true that a large part of the British borrowings was spent on tho purchase of foodstuffs for the civil population, but obviously supplies for civilians constituted essential war requirements, such as food for workmen. The indisputable facts are" that the money was borrowed by Britain and spent in the United States on United States commodities for purposes approved by the United States Treasury and in accordance with the United States statutes, for the prosecution of the war. Large Payments Made. "Britain provided sterling and neutral currencies to meet her own requirements in war time, and also bore the burden of covering the sterling requirements of her Continental Allies. Had not the United States, when entering the war, felt unable to relieve Britain of the latter portion of the burden, Britain could have met her expenditure in America from resources placed at her disposal by her Allies, and there is a human possibility that the British debt, to America would never have been incurred. The debtor is bound to comply with the demands of the creditor." He recalls that Britain, after the armistice, paid America £40,000,000 off the principal of the debt and also £58,000,000 off the war debt interest, but the United States Treasury's statement does not mention the fact.