WAR DEBTS

Southland Times, Issue 20171, 6 May 1927, Page 7

WAR DEBTS

BRITAIN’S POSITION REPLY TO AMERICAN CRITICISM GOVERNMENT’S UNEQUIVOCAL STATEMENT (By Telegraph—Press Asm.—Copyright.) Rugby, May 4. In a note to the United States Government on Monday the British Government states that the recently published letter on the subject of war debts addressed by Senator Mellon, Secretary of the United States Treasury, to the president of the Princetown University, "contains a specific reference to the position of Great Britain and that on the points of cardinal importance these statements do not correspond with the facts as known to his Majesty’s Government. Dealing seriatim with these statements the Note describes as incorrect Senator Mellon s allegation that all America’s debtors are alreadj- receiving from Germany more than enough to pay their debts to the United States, and that the British War Debt payments to America “impose no burden on the British taxpayer.” Great Britain’s receipts during the last financial year from Germany on account of reparations represent approximately one-quarter of the payments made by the British Government to the United States Government, and Britain’s prospective reparation receipts during the present financial year, assuming they are transferred in full, will fall substantially below one-half of the British payments due to the United States. Even if the receipts from Germany on account of the army costs, which represent a partial reimbursement of the British expenditure on the maintenance of their forces and on account of the Belgian War Debt, are included, the total British receipts from Germany in either of these years will not exceed pne-half of the British payments to the United States. There can'be no dispute as to these facts, which are published by the Agent-General for Reparation Payments and are fully available to the United States Treasury.

The Note describes as “inaccurate, both as regards the past and the future,” Senator Mellon’s figures regarding Britain’s receipts from the reparation and inter-Allied debts. It states that from April 1, 1919, to December, 1926, Great Britain had paid 828,500,000 dollars in respect of the debt to the United States Government whereas the sums received by Great Britain on account of reparations, the Belgian War Debt and the Allied War Debts up to the same date amount to 200,000,000 dollars, leaving a deficit of 628,500,000 dollars, or £129,500, 000. During the first two years’ operation of the Dawes plan from 1924 to 1926 Great Britain’s receipts from reparations, including the Belgian War Debt and the Allied War Debts combined, fell short of the British payments to the United States by 243,000,000 dollars. Regarding the last financial year, the United Kingdom’s share in the third Dawes annuity was £12,000,000 and her receipts from the inter-Allied War Debts £8,500,000, as against the payments to the United States of £33,000,000. During the current year her receipts from the fourth Dawes annuity should amount to £14,500,000 and from rhe inter-Allied War Debts £10,500,000, as against a payment of £33,000,000 to the United States. The share of the United Kingdom in the fifth and subsequent Dawes annuities should amount to £22,400,000 and this, together with the payments from the inter-Allied War Debts, assuming the French War Debt payment to have been ratified and neglecting the past deficits in British receipts as compared with the payments, would be sufficient to cover the current payments due to the United States Government. Whether the paj'ments from the Dawes annuities included in these calculations will in fact be received depends upon whether it is found possible to transfer the full amount provided for by the Dawes plan. But even if the full Dawes payments continue to be received for 60 years from now onwards the receipts of Great Britain from the reparations and the inter-Allied War Departments together will be less than that of the payments it is proposed to make to the United States Government on account of the British War Debt, assuming the interest at 5 per cent, to be added to payments and receipts in the past and future payments and the receipts to be discounted at the same rate. It is quite true that the British Government have frequently declared that their policy is to recover such a sum in respect of their war loans to the Allies as with their reparation receipts will suffice to cover the annual payments which they have to make to the United States, but this situation has not yet been reached and up to the present the British taxpayer has had to find the greater part of the payments to the United States from his own resources. Even after applying all the receipts from the reparations and the interAllied debts to this purpose, and using none of these receipts as a set-off against the interest which has to be paid on the loans raised by Great Britain, in no circumstances will Great Britain receive from the Reparations and the inter-Allied War Debts taken together more than she pays to America. The policy of the British Government on this subject has been repeatedly declared.— British Official Wireless. UNITED STATES REPLIES TO NOTE. (Rec. 9.15 p.m.) Washington, May 4. The Secretary to the State Department, Mr. Frank Kellog, replying to the British War Debt Note said: “I have the honour to acknowledge receipt of Mr Chilton’s Note of Maj 7 2, in which he communicated to the Government of the United States the comments of the British Government on certain statements contained in a letter dated March 15, 1927, from Mr A. W. Mellon to the President, Professor Hibbin, of the PrincGton University. The Government of the United States regarded the correspondence between Mr Mellon and Professor Hibbin as purely a domestic discussion, and does not desire to engage in any formal diplomatic discus’ion on the subject. Following upon a conference between Mr. Mellon and President Coolidge, the Assistant Secretary of State, Mr Castle, and Mr Mellon, issued a statement in which Mr Mellon stated that his letter to Professor Hibbin was not intended as a communication to the Britsh Government. He said that the British figures, which differ from his, were used in an accounting sense. In this statement 1 confined myself to answering the criticism of Professor Hibbin’s letter. It seems wholly undesirable to enlarge the field of possible differences by commenting on other phases of the British Note. It seems to me, however, that the reference to the share of the Dawes annuities to be received by the United States is rather unfortunate, in view of the very limited claim presented by the United States, contrasted with those presented by our associates in the war.” —A. and N.Z.