THE TANGLE OF DEBTS.

New Zealand Herald, Volume LXVIII, Issue 21067, 29 December 1931, Page 6

THE TANGLE OF DEBTS.

The problems confronting the projected international conference at the J:lague i arc enormously complicated by the difficulty of persuading all the Governments concerned to examine them comprehensively. At present, the tendency is to concentrate attention upon particular aspects from independent points of view. The French attitude is based upon insistence that reparations shall be paid in full, conditional as well as unconditional annuities, until France is completely relieved of her war debts to Britain and the United States. Moreover, it is claimed that M. Laval's visit to Washington secured an admission from Mr. Hoover that war debts areinvolved with reparations. In the United States, efforts are made to associate revision of war debts with disarmament, and there is still authoritative support, especially in Congress, for the doctrine that reparations is purely a European question. On the other hand, American bankers are hostile to the French demand that reparations should have priority over commercial debts, the conflict of opinion on this point corresponding with the fact that German commercial debts to America arc much larger than those to France. Germany contends that it is no longer possible to distinguish between reparations and commercial debts, a position that is supported by the reports of international committees which have demonstrated that past payments on reparations account have been

possible only because Germany has been able simultaneously to increase her commercial indebtedness. Since external borrowing is now impossible —indeed, Germany's creditors, especially in America, are demanding repayment of previous loans—the conclusion of the Advisory Committee that Germany cannot resume payment of reparations was inevitable. That judgment will presumably be endorsed by the committee which has been reviewing her commercial debt position. Hence, if the preparations for the Hague conference are to achieve a practical tesiilt they must be designed to persuade all the Governments to examine every aspect of international indebtedness and to accept the necessity of disposing of this problem promptly and finally, so that the world may be encouraged to escape from the morass into which it has been betrayed by the illusion of war debts and reparations.