The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, OCTOBER 7, 1922. AMERICA AND WAR DEBTS.

Southland Times, Issue 19658, 7 October 1922, Page 4

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, OCTOBER 7, 1922. AMERICA AND WAR DEBTS.

The American Bankers’ Association has passed a resolution urging the American Government to formulate principles upon which it will be enabled to act, together with other nations, to bring about the much needed rehabilitation of European countries and restore world peace. This is an os?en recommendation to the Government from the most expert opinion in (he country to favourably consider the cancellation of some or all of the debts which the European countries owe to the United States. It is an old question, but if to-day’s cables are correct the Administration regards the bankers’ proposal with disfavour, and it is clear that American opinion is not sufficiently educated to make the cancellation of war debts practicable. There has never been any doubt where American financiers stand in the matter. They favour the cancellation, or st least the partial caucellaticyi of the war debts for the simple reason that the debtor nations cannot pay. Mr Reginald McKenna, head of one of the largest British banks, in an address in the United States the other day, said that Britain acknowledged her debt to America, was able to pay it, and would pay principal and interest. But Mr McKenna also said that the other European nations cannot pay their debts, which means that they

cannot pay either Britain or the United States, for, while Britain is a debtor in regard to the United States she is a creditor in relation to her allies in the late war. Britain borrowed from the United States in order to lend the money to France, Italy, Greece and other friends, and if they would repay their debts to Britain it would be the simplest thing in t-he world for Britain to hand the money over to the United States and discharge her own liabilities. As Britain borrowed not for herself but for the common cause, which was America’s cause also, why should Britain alone, even if she is able to, be required to repay the United States ? The legal liability is there and Britain will never question it, but morally the United States should look beyond Britain to those who actually received and used the money. In fact the only right way to consider this question is to take the war debts as a whole and regard them as the debt of the Allies as a whole, and, since several of the debtor nations cannot meet their obligations either of principal or of interest, something has got to be done. The problem of the war debts is bound up with that of Germany’s reparation payments, and upon the settlement of both depends the rehabilitation of Europe and the recovery of economic security. The American bankers are right, but the American nation does not yet see clearly what is so plain to its financiers.