The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. MONDAY, MAY 9, 1927. OWING TO AMERICA.

Southland Times, Issue 20173, 9 May 1927, Page 6

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. MONDAY, MAY 9, 1927. OWING TO AMERICA.

The search for motives and the fear of influences of domestic politics offer the best explanations of the recriminatory tone of the exchanges over the British War Debt to the United States. For some reason the United States Secretary to the Treasury, Mr Mellon, seems to have an unhappy knack of giving out statements on this subject which after a brief examination are “shot to pieces” by people putting forward the European view. Mr Mellon’s initial statements obtain wide publicity in the United States and it is doubtful if the answers issued by British Cabinet Ministers are read as extensively by the people, and in this way the popular mind is given an erroneous impression of the situation. Informed opinion in the United States is thoroughly aware

that Britain, at no stage has asked for a revision of the Debt Settlement, and that she has dealt with her debtors far more generously than her creditors haVe dealt with her. It will be remembered that not so long ago her generosity to Italy was given a sinister twist because in * other countries, the United States included, the arrangement was regarded as a direct bid for some undisclosed political advantage. In some quarters in the United States the generous terms given by Britain have been criticised as an attempt to score off Washington—the French arrangement was received with comment of this kind —but the criticism of American newspapers is different from a considered pronouncement by the Secretary of the Treasury, who committed himself to the declaration that Britain was receiving more from German Reparations and her debtor nations than she was paying to the United States. Mr Mellon had available to him sufficient information to show him that this statement was incorrect, and it is doubtful if he will make any serious attempt to refute Mr Churchill’s reply. He has disclosed the reason for his initial reference to the subject in his reference to the suggestion . that War Debts should be cancelled. From the beginning the Republican Administrations have been nervous about any discussion of debt-cancel-lation and at every turn they have taken care to exclude this subject from the agenda papers of conferences dealing; with international questions. The British Government has never put these proposals to the United States, though a long time ago in answer to such a request from Britain’s debtors, it was made clear that if she were freed of her obligations she would be pleased to absolve from payments those countries owing her money as a result of the war. It is in the United States itself that some of the warmest advocates of debt cancellation exist. These are to be found principally among the big financial experts, who consider that the loss of prestige and the economic disabilities make a general cancellation desirable from the viewpoint of the United States. The arguments put forward by those advocates are not based on any desire to assist the debtor countries at the expense of the United States, but rather to improve the position of the United States in the world’s markets and to ensure a greater prosperity in that country in the future. The Republican Party, supporting the retention of a high protective tariff, cannot afford to appear before the electors as the party which gave away hundreds of millions of the taxpayers’ money, particularly when the advantages to be gained by the remission of these debts are not definite enough to be appreciated by the popular mind. The New York Times presents the enlightened view when it says:

Just now to the common man war debts look like a great asset, but if it finally penetrates his mind that they are a large part of the national liability, not only hurting our foreign trade, but hurting our prestige, and impairing goodwill towards us, he will be more ready than he is to-day to reconsider and rearrange these debts.

But the New York American, also standing on the Democratic side of United States politics, and expressing the popular view, says.

Mr Mellon does not see why American taxpayers should be charged 160 million dollars per year in order to make Mr Churchill the matinee idol of the League of Nations.

A Washington message states that in “wellinformed quarters,” which may not be far from the White House, the exchange of Notes should “not necessarily be accepted as an attempt to re-open the BritishAmerican Debt Agreement,” a choice of words which leaves the suggestion that the possibility that it does mean an effort to reopen the arrangement cannot be wholly dismissed; but the British Government all along has declined to take any steps in this direction and the peculiar language of the Washington message becomes more significant in view of that fact. Although the incident is declared closed, and its influence on international relations regarded as small, the effect on the American voter need not be minimised, and that is probably tne view which will appeal most forcibly to the leaders of the Republican Party which is approaching the coming elections with misgivings, because the Coolidge Administration has lost ground for the party, particularly in the West and the Middle West.