RECONSTRUCTION LOANS

New Zealand Herald, Volume LXIX, Issue 21293, 21 September 1932, Page 9

RECONSTRUCTION LOANS

EUROPEAN DEFAULTERS

BRITISH INVESTORS' CASE

LOSS OF CONFIDENCE RESTORATION ESSENTIAL By Telegraph—Press Association— Copyright (Received September 20, G. 55 p.m.) LONDON, Sept. 20 After all the bother a year ago over the possibility of an Australian default it is refreshing to find that the influential League of Nations- Loans Committee, in London, of which Sir Austen Chamberlain, formerly Foreign Secretary, is chairman, has sent a memorial to the Cabinet urging that steps be taken to restore confidence in .the League's European reconstruction loans in which Greece, Hungary and Austria defaulted and Bulgaria did less than she promised. A similar memorial has been sent to the Council of the League.

The memorials state that British investors subscribed about £40,000.000 out of £83,000,000 in the faith that special security was attached to them and the belief that both tlje Council of the League and the British Government would exercise special watchfulness in that connection.

If the'defaults were not remedied, the whole machinery of European reconstruction and the future of international investment would suffer a severe and lasting shock.

The Times in an editorial article says:— " It is essential that the Governments, both of the creditor and the debtor Powers, should agree to recognise the special position of these loans. Only then can be considered a temporary and orderly scaling down of the obligations. The Council of the League must take immediate steps to rehabilitate it.s financial reputation by dealing with these defaults in a constructive, businesslike manner."