DEBTS AND REPARATIONS

Otago Witness, Issue 4041, 25 August 1931, Page 27

DEBTS AND REPARATIONS

BARRIER TO WORLD RECOVERY BANK DIRECTOR’S OPINION. LONDON, August 19. “ I see no prospect of permanent improvement in trade or unemployment except through a drastic scaling down or concelling of reparations and war debts,” declared Mr Alexander Shaw, a director of the Bank of England, in a speech delivered at Glasgow in connection with the launching of the P. and O. liner Carthage. He added: “Whenever trade and eirtployment seem to revive the eternal question of reparations recurs and down everything rolls to the bottom. No amount of business energy or financial skill will cure the disease which is keeping British factories and shipyards idle, and no jockeying of money values .will cure it. Great blocks of the production of certain countries are pledged to be handed over to other countries to pay for past destruction. The mechanism of foreign exchanges is incapable of carrying such a burden, which has only been eased in recent years by creditor countries lending debtor countries the bulk of the funds with which to pay reparations and war debts. Whenever creditor countries grow weary in the process the situation of a debtor country like Germany grows desperate and Europe hangs over a pit till an international conference leads to an agreement to continue the lending process.”

BISHOP OF LONDON'S PLEA. VANCOUVER, August 18. Closer relationship, spiritual and economic, among the nations is the solution of the present world difficulties, Dr Winnington Ingram (Bishop of London) declared at a Canadian Club luncheon to-day. He reiterated his old plea for a complete cancellation of war debts. His Lordship said he believed that people were beginning to see that cancellation was the only way, and the moratorium was an indication of that opinion. “They are finding out that one nation cannot be prosperous entirely at the expense of another,” he added. Dr Ingrain will visit Vancouver Island during the week to enjoy the fishing.

CREDIT FOR GERMANY. LONDON, August 19. The report of the Experts Committee on the extending of short-term credits to Germany is signed by all the members. It says that Germany's short-term debt to-day is 7,400,000,000 marks, while her short-term credits of 2.900,000,(j00 marks were withdrawn during the last seven months. “It is evident that German economics must remain under very heavy pressure until the Reichsbar.k’s position is relieved and at least a portion of the withdrawn capital is replaced.” The report pleads with all the Governments to take immediate measures

create a situation favourable to Germany, and eventually to the whole world. Only the restoration of free exchange of money and products would dispel the partial paralysis from which the economic organism was suffering. Germany’s lack of confidence was unjustified, but unless it was restored it would be impossible in future to place long-term loans to her credit alone. The report urges improvement in the currency by the compression of imports and the development of exports. THE BASLE AGREEMENT EXPERTS’ DELIBERATIONS. BASLE, August 19. Agreement on the question of an extension of short-term credits for Germany was only reached after a prolonged session. The German delegates 'secured an adjournment while they consulted Berlin, after which they asked for modifications of the experts’ proposal. The experts refused and announced that they would have to notify the Governments that an agreement was impossible. Finally, after midnight had struck, the Germans agreed.

BANK SUSPENDS PAYMENTS. BERLIN, August 19. The Cassel bankers, Damms and Streit, have suspended payments.

AMERICAN RECOMMENDATIONS

A COMPLETE REVISION

WASHINGTON, August 19.

Administration circles are silent to-day on the report of the Wiggins Bankers’ Committee, which recommended a revision of the whole of the war debts and reparations structure. At White House it was said that Presi dent Hoover, after reading the press reports, was uncommunicative. One high official of the State Department described the report as of “ great importance.” Hl- - no further comment.

BANKERS’ REPORT FROM BASLE.

A SIGNIFICANT CLAUSE.

BERLIN, August 20.

Attention is being attracted by a paragraph in the bankers’ report from Basle, which says: “We think it is essential that the international payments by Germany should not imperil the maintenance of her financial stability.” This is

interpreted here in’ the nature of a recommendation for a general revision of reparations.

WALL STREET PLEASED. NEW YORK, August 19. The Wiggins Committee’s recommendations created considerable satisfaction in Wall street, banking circles being in line with the opinions recently expressed informally by prominent bankers.

WARNING TO THE WORLD. RUGBY, August 20.

Commenting on the report issued at Basle by the Bankers’ Committee which was appointed by the London Conference to examine the credit needs of Germany, The Times congratulates the bankers on producing a very important document, which deserves the most careful study of the various Governments concerned.” The whole essence of their conclusions is shown with unmistakable clearness—• that no solution of Germany’s financial difficulties is possible unless the fundamental problem of reparations is settled on a realistic basis. That such very plain speaking should have been endorsed by the French representative on the committee is very satisfactory.” After referring to the terms of the report which empasise the urgent need of immediate action on the part of the Governments to restore confidence, The Times says: “ Though the exact interpretation to be given to this passage in the report by the various signatories and their Governments will no doubt vary, there should be no great difficulty in arriving at the essence of its meaning. It is a warning to the world that the problem of reparations must be reconsidered, and that quickly, if further chaos is to be avoided. Amid the confusion of the present crisis it is clearly impossible to determine how far the German balance of payments will permit of a resumption of her reparation obligations, but it is vitally important that sufficient breathing space should be provided to reconsider the whole problem under its new aspects in the ensuing months. The Hoover year would seem to be scarcely sufficient to do this satisfactorily, but if it is found practicable to prolong the moratorium on political debts it might then be feasible and politically acceptable.”