THE OTAGO DAILY TIMES FRIDAY, JANUARY 23, 1931. WAR DEBTS.

Otago Daily Times, Issue 21241, 23 January 1931, Page 6

THE OTAGO DAILY TIMES FRIDAY, JANUARY 23, 1931. WAR DEBTS.

There is nothing surprising in the evidence that differences of political opinion in the Old Ountry concerning the terms of the settlement of the British .war debts to the United States are by no means reconciled. Tin publication by the Conservative Ccijral Office of a defence of the arrangement negotiated by Mr Baldwti has naturally revived some discusion relative to the circumstances i which the settlement -was effected.' It is now just about eight years sine Mr Baldwin headed a mission to the Inited States, and brought back an agreement representing some measure od compromise on the conditions origiully required by the Government at Washington. Under the terms of that greemcnt the principal sum to be repaii was fixed at 4,600,000,000 dollars, repayment to be made over a period of G years, and interest to be at the rte of 3 percent. for the first ten yes's, and after that at the rate of 3J pa cent. The settlement involved annial payments of about £33,000,000 flom 1923 to 1932, and of about £38,j00,000 from 1933 to 1984. Prior p the adoption of this arrangemem the British Government issued what is known as the Balfour Note, in, whch it stated

that it did not propose to exact in debt repayment from the Allied Powers more than would suffice, when added to its reparation receipts, to meet the sums which Britain* was called upon to pay to the United States. The declaration of policy in the Balfour Note reiterated, be it added, that Great Britain —being owed nearly four times as much by the European Powers as she owed to America —would have preferred a general cancellation of both claims and liabilities if that could be made part of a satisfactory inter national agreement. The BalfoV Note was not favourably received A the United States. For differ^ reasons a section of opinion in Britain has not regarded the p* ic y embodied in it as satisfactory, _ Lt may be remembered that, souk little time prior to the Labour Part) seeming a second term of office, M Snowden created something of a ensation in the House of Commons bya speech in which he declared that t e Labour Party had never subscribd to the Balfour Note and held itsef at liberty to repudiate its circumstances Mr Ramso' MacDonald had to do the best he cold to take the edge off Mr Snowden’s pronouncement, and explain that so >ng as he was head of the Labour prty there would be no repudiation. In the United States agreement as to the merits of the war debt settlement with Great Britain is not unfdmous. There are those who advoete, if not an entire remission of wa debts, at least a reexamination of/he position on a basis, as members of*e Faculty of Political Science at Coimbia University put it, “ not of imrodiate expediency, but of justice and f generous intention that would give no reasonable ground for misunderstnding.” Americans who think in Ms way recognise that the war indebtedness was incurred in a common ause, the successful championship of Mich was all-important to the United States. They recognise also the inguitableness of the variation of treatmnt accorded by the United States to different debtors —Great Britan paying, for example, 82 per cent, and Italy only 26 per cent.— amhatterly American opinion has been execised somewhat over the question of the consequences of the accumulate of, gold in the United States that if being effected at the present time. an interesting reference to the war iebt problem in a speech at a recent function at the Guildhall Mr F. C. Goodenough,' chairman of Barclay’s Bank, expressed the belief that England and America and the whole world would gain enormously by some plan that would deal with the war debts under -the altered conditions arising out of the fall in world prices. His suggestion was that, if cancellation is impossible, the Governments concerned should at least arrange to adjust such debts to a basis varying with the price levels of commodities, which “ must have the effect of lifting a great burden off the shoulders of the world.” If it be the case, as has been influentially argued, that, among the causes of the economic ills from which the world is suffering, the weight of international indebtedness, with its effects upon credit and exchange and upon national production and international trade, is possibly the greatest, there is surely occasion for effort on the part of the commercial interests of all nations to endeavour to secure recognition by the various Governments of the desirability of a reconsideration of the war debt situation.