WAR DEBTS NOTE

Poverty Bay Herald, Volume LIX, Issue 17955, 6 December 1932, Page 6

WAR DEBTS NOTE

THREAT TO AMERICA POSITION EXPLAINED POSSIBLE BRITISH ACTION (British Official Wireless.* lice. 2 p.m. BUGBt, Doc. 5. As sonio misunderstanding has occurred regarding the reference in the British wiir debt note lo the consequences of a resumption of 'paymenls. the exact words of the note on this subject are creating particular interest. After making the point that the discharge of all international debts must finally take the form of the transfer of goods and services,, the note said: “If, therefore, war debt payments had to be resumed, it is apparent that the exchange position of. this country would need to be strengthened by,, a reduction of thy , very heavy adverse balance of .visible trade between the United Kingdom and the , United States, which Amounted to £76,000,000 in 1931. In the present circumstances, this, could only be done by adopting measures which would further restrict British purchases of American goods. The United Kingdom has up to the present generally been the best customer of the United States, and the result of such restrictions inevitably would be to reduce specially the market in the United Kingdom for American farm products. To the extent, therefore, that the payments are resumed to the United States Treasury, a definite and unfavorable reaction must follow to the United States producer.

“Moreover, His Majesty’s Government also lias to guard against the efforts which would follow if the facilities offered bv the British market were used .)iv other debtors of America to obtain sterling, which they would then sell across the. exchange to meet their obligations to the United States Government.. After the war, the United Kingdom attempted to maintain its traditional system of free imports, with the result' that .debtor countries throughout the world sold goods ,on the British market and. took the proceeds away over exchange or in. gold to meet their obligations elsewhere. Under the stress of the present crisis,- His Majesty’s 'Government has, had to modify its system and adopt,tariffs, but the, United kingdom still imports, froj'n abroad foods to the value of several hundred ,of: millions pounds in excess of. wimt it, exports., ..It will be. necessary to consider what action could. be taken to secure that the, sterling proceeds. of these imports were used more largely .for the benefit of the British market." , - . Mr ‘Stanley. Baldwin, the aetingPrimo.. Minister, had. a conversation with.Mr Andrew Mellon and discussed various points, of, the. British note.