WAR DEBTS

Otago Daily Times, Issue 22023, 4 August 1933, Page 8

WAR DEBTS

The statement, made in our cabled news yesterday on the authority of a London daily paper’s correspondent in Washington, that President Roosevelt expects that the debt payments to the United States that are due in December will he made in gold is not one to which it is necessary to give a great deal of credence. It is inconsistent with the understanding that was arrived at between the Governments of Great Britain and the United States when the token payment of 10 million dollars was made in silver six weeks ago. It is also incompatible with the repudiation by the United States

Administration of its own covenant to pay the interest on Federal bonds in gold. The payment that was made by Great Britain in June last constituted an acknowledgment of the debt “ pending a final settlement,” and in its Note, expressing the conclusion which it had formed with refei’ence to the payment at that time, the British Govex’nment invited the United States Government to state where and when it would be prepared to begin negotiations for “ the ultimate settlement of the whole war debt question.” President Roosevelt, while sheltering himself behind the constitutional principle that Congress alone has the right to alter the amount and method of payment of the debt—a principle that did not deter him, in the exercise of the dictatorial powers with which he has been clothed, from accepting the token payment —replied to the invitation by asking that representations be made in Washington “as soon as convenient.” There the matter rests at the present time. The representations on behalf of the British Government have not yet been made. Now that the World Economic Conference has adjourned and that the British Parliament has gone into recess, it may be expected that fresh consideration will be given to the question of the war debts. It is wholly idle to suggest, as is done in the message from Washington to which we have alluded, that “there will be no revision talk until 1934, and then only if prosperity has returned in America.” A statement of this kind may represent the views of those members of the United States Congress who demand that the strict letter of the bond shall be observed. But these worthy gentlemen live in a world of their own in which there does not seem to be any appreciation of conditions beyond it. The material consideration which they ignore is that if Great' Britain is to go on paying the war debts the Lausanne agreements must be terminated. Under these agreements Great Britain has undertaken to exact no more in the name of reparations and war debts provided that the United States wipes out the British war indebtedness to her. Actually there can be no revival of the questions that were supposed to be decently buried at Lausanne. It is not imaginable that any attempt to extract new reparation payments from Germany would be successful. And it is out of the question to suppose that Great Britain will indefinitely make payments to the United States for money lent to the Allies during the war on which no interest is being paid. President Roosevelt will be disappointed if he really believes — which may be doubted —that there will be any war debt payments in December in gold. The time has to come when these payments must be discontinued. The token payment in June last might reasonably have been accepted as an intimation that that time has now arrived.