GENEROUS BRITAIN

Poverty Bay Herald, Volume LX, Issue 18266, 8 December 1933, Page 7

GENEROUS BRITAIN

AID TO NEWFOUNDLAND PROPOSALS OUTLINED PUBLIC DEBT CONVERSION (British Official Wireless.) Roc. noon. RUGBY, Dec. 7. Mr Neville Chamberlain, in the House of* Commons, moved a resolution on which a bill will be founded to carry out the recommendations of the Royal Commission on Newfoundland. The present 'public debt of Newfoundland, he said, amounted to £17,500,000. plus 0,000,000 Canadian dollars, about £10,000,000 at the present rate of exchange, on which the yearly interest was about £1,000,000, representing (J 5 per cent of Newfoundland’s total revenue. The British Government bad no hesitation in going to (lie aid of the colony.

He proposed in regard t.O the Newfoundland debt that, the bulk of the creditors would not lie 'paid in cash, but would receive stock of equal face value, backed by the Government of the United Kingdom, with interest at 0 per cent, which the Government was advised would produce a par value equivalent to the initial value of the stock. The effect of the proposals was that the annual interest burden would lie reduced by £350,000 a year, ami the debt would amount to £-’,00(1,000 of trust securities and about £17,000,000 of new stock. The new stock would carry a sinking fund >f I per cent which would start in mil more than live years, since the burden of that sinking fund would be an additional £170,000 a year, but they might hope that, before that began the financial conditions of Newfoundland would be so much improved that, the burden would not prove to be excessive.

They must assume that it would lie necessary for some years for Britain to come to the assistance of Newfoundland, and make up the deficiency in her Budget. The British Government proposed that whatever advances, were necessary, should, up to the end of 1936, be a free gift from Britain, and that afterwards they might be by loan or gift as decided later. He estimated that, including £550.000 which Britain had already found during the last 12 months, and which was a free gift, Britain’s total liability by the end of 1936 would amount to from £1,580,000 to £2,000,000.