DEBTS TO AMERICA

New Zealand Herald, Volume LXIX, Issue 21345, 21 November 1932, Page 9

DEBTS TO AMERICA

BRITAIN'S POSITION

ADVERSE TRADE BALANCE

[REPAYMENT DIFFICULTY

SUGGESTED REMEDY

NEW ISSUE OF BONDS

By Telegraph—Press Association—Copyright (Received November 20, 7.55 p.m.) LONDON, • Nov. 19

The trade figures for the past 10 months suggest that Britain is likely to be faced with a heavier adverse balance than last year.

The Financial News estimates the excess of imports of merchandise at £330,000.000, which, it says, is partly offset by invisible exports, including shipping, incomo from overseas investments ancl commissions, a total of £240,000,000. The adverse balance, therefore, is likely to be £90,000,000, compared with £75,000,000 in 1931

The figures reveal the impossibility of a regular resumption of American debt payments. The uncertainty in that connection depressed the markets all this week and caused a renewed fall in sterling. The payment due to the United States in December equals the value of four years' British exports to that country.

The Economist suggests that the existing obligations should be replaced by a fresh issue of bonds for a limited amount. It says the debtor Governments could safely float them in America. This would involve a reduction of war debts equivalent to the Lausanne revision of reparation annuities.

American financiers,- administrators and the press, says the Economist, realise the impossible position. It is the American public alone which refuses to face realities.

COMING CONFERENCE

LEADERS AT WASHINGTON

RIGID ATTITUDE PREDICTED

(Received November 20, 5.5 p.m.) WASHINGTON, Nov. 19

Political forecasts" indicate that when the President, Mr. Hoover, and the Presi-dent-elect, Mr. Roosevelt, informally discuss foreign debts on Tuesday the prevailing capital atmosphere will be against a further moratorium or reduction.

From the highest Administration sources has come word that the President is 'definitely opposed to another year's moratorium and prefers the adoption of an attitude more rigid than the continued suspension of payments requested by Britain, France and Belgium. Like the President, Mr. Roosevelt has declared against cancellation. While he has been silent on the requests for a reexamination of the debt problem prominent Democrat legislators have joined the Republican leaders in declaring against the suggestion.

COST OF DEBTS

INCREASE TO BRITAIN

DECREASE IN CASE OF FRANCE

(Received November 20, 6.35 p.m.) NEW YORK, Nov. 19

The New York Times in a financial article to-morrow will say: " Measured by what they could buy with the money in their own countries the real cost of the war debt payments has increased 87 per cent in the case of the British taxpayer and decreased 30 per cent in the case of the French taxpayer since funding agreements were made. " The real value of the payments to pur Government has risen 54 per cent."

The percentages are calculated by comparing the present currency, exchange rates, "costs of living, etc.

DOMINION'S POSITION

RELIEF IN ANY CASE

DEBT TO BRITAIN SUSPENDED

[BY TELEGRAPH —PRESS ASSOCIATION"]

WELLINGTON, Saturday

In a statement to-day, the Prime Minister, Mr. Forbes, pointed out that even if the United States did not grant a renewal of the Hoover moratorium and called upon Britain to pay an instalment of £28,000,000 on December 13, New Zealand would not be called upon to pay her share of the debt.

Mr. Forbes recalled that he announced in his Budget speech that Britain had agreed to suspend for another year all payments due on the funded war debt and certain other debts due to the British Government. This meant relief to the Dominion this year of £825,000, in addition, to which a saving of £47,000 would accrue tp the State Advances Office. Mr. Forbes said this concession meant ft great deal to the Dominion, for the Budgetary situation would .have been badly upset had the Dominion been called Upon to find this amount. Revenue was shrinking to-day and the relief to the Dominion was a very real one.