AMERICAN LOAN

New Zealand Times, Volume LIII, Issue 12507, 24 July 1926, Page 9

AMERICAN LOAN

BRITAIN’S USE OF THE MONEY ATTITUDE OF AMERICAN TREASUR! MR CHURCHILL REPLIES By Telegraph.—Press Assn.—Copyright. Australian and N.Z, Cable Association. LONDON, July 22. Mr Winston Churchill, Chancellor of the Exchequer, in a statement in reply io the AmeTcan Treasury’s attitude towards the British debt to America, 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 the adverse discrimination . with which she lias been treated, but, when the discrimination arises from a misconception of the facts, the necessary corrections must be 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 constitute a portion of Britain’s independent resources. Such expenditures essentially constituted a purchase of exchange for sterling, and must clearly he regarded as independent resources. "When the American Treasury alludes to 1853 million dollars obtained from our European Allies as a reimbursement, it is forgotten that Britain would have obtained many of her requirements from the British Dominions and elsewhere, but arranged for the Allies to obtain them from such sources, while Britain obtained the same from America. While the Allies repaid Britain a considerable proportion of such expenditure, a large proportion of it was still included in Britain’6 debt to America. "In any case, the fact remains that British purchases of American, munitions, foodstuffs, etc., essential for the prosecution of the war, largely exceed the amount Britain borrowed from the United States.” INDISPUTABLE FACTS. (Received July 23, 7.15 p.m.) "It is quite true that a large part of the British borrowings were spent on the purchase of foodstuffs for the civil population, but obviously supplies for civilians constituted essential war requirements, as food for workmen. "The indisputable facts are that the money was borrowed hv Britain and spent in the United States on United States commodities for purposes approved by tht. United State* Treasury, and in accordance wiC’ the United States statutes for tVprosecution of the war. BRITAIN’S DOUBLE BURDEN. "Britain provided sterling and neutral currencies to meet her own requirements in wartime, 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 her burden. Britain could have mot her expenditure in America from the resources placed at the disposal of her Allies, and then, in all human possibility, the . British debt, to America would never have been incurred.” Mr Churchill concluded: "A debtor is bound to comply with the demands of a creditor.”

He recalls that Britain, after the Armistice, paid America 40 millions sterling off the principal of the debt, and has also paid 58 ; illions off the war debt in interest, but the American Treasury’s statement does not mention that fact.