EUROPE’S BURDEN

Southland Times, Issue 21578, 16 December 1931, Page 5

EUROPE’S BURDEN

WAR DEBT PAYMENTS ATTITUDE OF AMERICAN GOVERNMENT NECESSITY FOR REVISION (United Press Assn.—By Telegraph—Copyright.) Washington, December 14. The following statement in regard to War debts has been issued by the Secretary of the Treasury, Mr A. W. Mellon: “The Administration is opposed to cancellation. It is, however, the duty of those in authority to deal with realities and there is no escaping the fact that some of our debtors cannot meet, in full, the .payments due to us until there has been a substantial measure of economic recovery, and that the position of the others is so changed as to necessitate consideration of their present situation in the light of existing circumstances. Our debt settlements were effected on the basis of the oapacity of our debtors to pay. Take the case of Britain, who is our best customer. The economic and financial changes of the past year have immensely increased the burden of her payments to us.” The Secretary then outlined the details of the suspension of the gold standard and the depreciation of sterling by 32 per cent. “All the debts to Britain,” he said, “from foreign governments, except reparation payments which are not being collected this year and are not likely to be collected in full next year, are payable in sterling. Her debt to us is payable in gold dollars and the combined effect of these unfavourable 'factors will result in an enormously increased burden on the people of Britain. The payments due during the present fiscal year will serve to exemplify the magnitude of the additional burden. With the £ at par her Treasury needs £32,800,000 in order to pay us 159,500,000 d&llars. With sterling at the rate of December 10 it will take £48,100,000 or, in other words, the burden on the British taxpayers has increased approximately one half. When the British debt settlement was made it was estimated that its present value at the 4} per cent, interest rate was 80 per cent, of the total amount due prior to funding, but now the British taxpayer would be asked to meet not the obligation as established by our debt commission, but an amount considerably in excess of such an obligation. Nothing could more forcibly illustrate our duty for re-examining the obligation to our debtors.” The Secretary then asks whether anyone believes Austria-Hungary should be asked to pay the instalments or Germany make the payments on the cost of the army of occupation. “What intelligent business man would blindly refuse to investigate or consider the altered circumstances of a debtor whose unsecured obligations he held ?” asks Mr Mellon. “Congress should go into the position through a commission, composed of its own members, to ascertain what the facts actually are and deal with the new problems as they arise. I am confident that upon mature consideration the President's recommendation for the re-creation of the World War Foreign Debt Commission will commend itself to Congress." GERMANY’S POSITION INVESTIGATIONS AT BASLE. (British Official Wireless.) Rugby, December 14. The Consultative Committee of the Young Plan at Basle considered the economic and financial situation in Germany in her relations with other countries. A statement regarding the repercussions of reparation payments in causing an intensification of German exports was submitted by M. Colijn. | Mr Stewart (United States) observed that the present crisis was as abnormal as the period of prosperity which preceded it, and said it was wrong to be too pessimistic because after passing the extremes of prosperity and depression a normal point would be reached. The committee last week completed the first stage of its work by the collection of material, making a general picture of Germany’s economic situation. It inspected in succession her position as a debtor and creditor regarding long and short-term investments, and inquired into her balance of trade, capital movements, the budgetary position, the situation of the Reichsbank and the incidence of these matters on the economic life of Germany. EXPERTS’ VIEW LONGER MORATORIUM. (Rec. 9.45 p.m.) London, December 15. The Basle correspondent of the Morning Post says the majority of the experts are believed to be in favour of a further longer moratorium for all reparations, after which the German position should again be examined. The Daily Telegraph’s special correspondent says the committee has not yet discussed the question of Germany’s ability to pay reparations. The statistical committee, to which the matter was referred, has not yet even begun to draft its report. There is, however, a growing conviction among the experts that only drastic revision can avert a world economic catastionhe. INSTALMENTS DUE THE MORATORIUM SCHEME. (British Official Wireless.) Rugby, December 14. Although the ratification of the Hoover moratorium scheme by the United States Congress will not be completed by tomorrow, which is the date on which the half-yearly war debt payments have hitherto been made, Mr Ogden Mills, Under-Secretary of the American Treasury, announced that a majority for ratification at a later date was assured. Meanwhile, adds Mr Mills, the non-payment of instalments pending action by Congress will not be subject to criticism. It is possible the House of Representatives will complete its discussions of the Ratification Bill and take action by Saturday. The British Government has not re-

quested any plain assurance on the point, but in the special circumstances there is no question of Britain being considered in default. BANK OF FRANCE LOSSES ON STERLING HOLDINGS. GOVERNMENT AID OPPOSED. (Rec. 5.5 p.m.) Paris, December 15. A bitter debate in which a hundred deputies intend to speak is proceeding on a Bill proposing to reimburse the Bank of France for losses on holdings of sterling. It is suggested that the loss should be deducted from the French debt to Britain. Socialists contend that if ( the bank on its own initiative accumulated sterling it should not be reimbursed. If it acted on Government instructions it should obtain concessions from Britain. The Prime Minister, M. Laval, strongly opposed a motion for shelving the Bill, and made the question one of confidence. The motion was defeated by 307 votes to 274. A later message states that the Chamber of Deputies passed the Bill by 321 votes to 269.