WAR DEBT CRISIS

Poverty Bay Herald, Volume LIX, Issue 17949, 29 November 1932, Page 5

WAR DEBT CRISIS

AMERICA'S FIRM STAND PUZZLED BY OPTIMISM EFFECT ON EXCHANGE (Elec. Tel. Copyright—United Press Assu.) (Received Nov. 29, 11 a.m.) WASHINGTON, Nov. 28. In view of tho unwillingness of the United States to extend tho war debt moratorium, tho indications are that debtor nations will meet with disappointment in their persistence that some means of postponing the December 15 payments could be found. The administration is puzzled by tho degree of optimism which seems to prevail in European capitals, despite the notes sent to Britain, France, Belgium, Boland, and Czecho-Siovakia, advising them to meet their obligations. In almost identical terms, the State Department informed Poland and Czecho-Slova-kia that the President had no authority to extend the moratorium, and no facts luid 'been placed “in our possession vhicli could be presented to Congress for favorable consideration.” Sterling toppled to a record low level price in terms of the United States dollar to-day, giving ground early in the day for London cables to the 1920 low point, and later falling through that figure. It had broken about four cents from Saturday’s (close, well before noon, and foreign exchange dealers said London and New- York were the principal sellers.

The Canadian dollar was down 1 3/15 cents at the start, opening at 83-J cents. In the United States the weakness is attributed partly to sympathy with sterling, and also to seasonal influences. The European gold currencies arc steady, the French franc rallying cent to 3.9 L) cents for Paris cables. DISASTROUS RESULTS LONDON TIMES COMMENT LONDON, Nov. 28. The Times .-ays:—“lt is not expected that the British war debt note will go into the general question of debt revision. The Government should confirn itself to explaining in simple language the disastrous effects which are bound to follow Die .Uansfer of 95,500.000 dollars in the present crisis. Tt must seem irrelevant to the average American to emphasise the strain which the provision of that sum would impose on the over-burdened British taxpayer. What concerns America is the effect upon American exchanges and trade, coupled with further depreciation of sterling, and the unsettlemcnt of the whole reparations agreement- achieved at Lausanne It is not easy for the American taxpayer to understand how lie will become poorer, not richer, by exacting the payment of debts legally due. There need be no appeal to sentiment. He is merely asked to refrain from adding to his own burdens.” AUSTRALIA’S POSITION POSSIBILITIES OF RELIEF LONDON, Nov. 22. Even if Great Britain has to resume her war debt payments to the United States in December, it is probable that she may agree to Australia further postponing payment of interest on her war debt to Great Britain.

The initiative, apparently, will have to be taken by Australia by placing her position before Great Britain in the same way that the latter’ is placing hers before the United States.

Meanwhile, pending the meeting of President Hoover and Mr. Roosevelt, great uneasiness prevails in political and financial quarters here, and was reflected in a depressed Stock Exchange and a fall in sterling. There will be a great surprise if the moratorium is extended. If payment is requested, Great Britain will definitely meet her obligations, regardless of the blow to her finances. It is considered that Great Britain could never afford to default, despite the serious repercussions of paying, because her prestige would be greatly weakened and would strain AngloAmerican relations, which is the last thing the Government wants to do. It is recognised, nevertheless, that if America demands payment, Anglo-Ameri-can relations will still bo seriously prejudiced, because British opinion overwhelmingly demands prolongation of the American moratorium.

STERLING’S LOWEST LEVEL

(Received Nov. 29, IT a.m.) LONDON, Nov. 28

Sterling opened at 321 cents and dropped to 3.19$ cents, the lowest ever officially recorded.