INTERNATIONAL DEBTS.

Otago Daily Times, Issue 18624, 4 August 1922, Page 4

INTERNATIONAL DEBTS.

The stabilising of the European currency is perhaps the most urgent need of the time in the interests of a common civilisation. Stabilisation, however, is not possible until a satisfactory solution of the problem of the International War Debts can be solved. The complexity of that problem is revealed, not only in the terms of the Note which the Earl of Balfour on behalf of Great Britain has addressed to the Allied Powers, but also in the comments which the publication of that Note has evoked. It has been seriously proposed, with a groat deal of force, that the best way out of the financial impasse* which constitutes an unfortunate legacy of the Great War, would be provided in an agreement on the part of all the nations concerned to cancel the total accumu-

lation of war debt and make a fresh start with a clean sheet. It may be remembered ■ that a suggestion of this kind was made tentatively and very guardedly by Mr Austen Chamberlain, when he was Chancellor of the Exchequer, but it was immediately abandoned owing to the objections that were raised by the United States. The position taken up by the British Government, and fully outlined in the Earl of Balfour’s Note, is substantially a strong one. If a settlement were effected whereby the existing war debts, which aggregate the titanic total of £3,400,000,000, exclusive of interest accumulated and unpaid, would be extinguished, Great Britain would stand to remit more than would be remitted in her favour. Notwithstanding this fact, she' would be prepared to cancel all her debts, if on the other hand her creditors should be willing to annul their demands upon Tier. Not only so, but she would be prepared to surrender her share of the German reparation payments as well as abandon her claim for additional payments from the Allies, provided this were regarded as part of a general plan for rescuing the world from the economic evils that are now being inflicted upon it. Short of the acceptance of a policy of this heroic nature, Great Britain seeks only so much from her debtors as will defray the demands of her creditors. Further than that she can scarcely' be expected; to go when the heavy burden of taxation which her people aye required to shoulder, is home in mind. Her offer is transparently disinterested and generous. The vicious circle around which the war debts problem revolves may be illustrated in two plain statements. An influential Paris newspaper suggests that France should make it that as long as Germany fails to pay reparations France cannot repay any war debts to Great Britain, while, other representative French papers comment bitterly on the British proposal as one that involves, in effect, an abandonment of France. It is also stated , that the belief in official circles in Washington is that the Earl of Balfour addressed his Note to the Allies in order to make the fact plain that while Great Britain is will-i ing to cancel the Allied debt this cannot be done as long as the Government of the United States insists upon payment of the debt due by her. At the same time the financiers of America are fully alive to the economic .ills caused by the enormous weight of this international indebtedness and at least a section of them are alarmed lest in an attempt to grasp the shadow of a huge war debt their country may miss the substance of activity in commerce and trade.