DEBT SETTLEMENT

Southland Times, Issue 22043, 16 June 1933, Page 7

DEBT SETTLEMENT

PARTIAL PAYMENT BRITISH OFFER ACCEPTED r k APPROXIMATELY £2,000,000 “A MESSAGE OF HOPE” The President of the United States, Mr Roosevelt, has accepted Britain’s offer to pay 10,000,000 dollars (about £2,000,000 at par) of the June instalment of her’ debt to America as an acknowledgement of the debt pending a final settlement. The payment is being made in silver at 50 cents per fine ounce.

The settlement of this delicate problem is regarded as a good augury for the success of the World Economic Conference and through it a return to prosperity. The courageous manner in which Mr Roosevelt faced the situation has evoked admiration in London, and, to quote Mr Winston Churchill, the American President has given a message of hope to the world.

U.S. PRESIDENT

COURAGEOUS ACTION COMMONS DISCUSSION ( GENERAL SATISFACTION (British Official Wireless.) (Rec. 5.5 p.m.) Rugby, June 14. The exchange of views between the British and United States Governments has now been completed and the Chancellor of the Exchequer, Mr Neville Chamberlain, was able to announce in the House of ommons to-night that with the full assent of Mr Roosevelt the payment of 10,000,000 dollars (approximately £2,000,000 at par) was to be made as an acknowledgment of the debt pending a final settlement. Mr Chamberlain, speaking on the motion for an adjournment, explained that it had been impossible hitherto to arrange simultaneous announcements in London and Washington. When the December payment was made Britain had sought an early exchange of views with a view to the conclusion of the discussion before the June instalment. If Britain had paid in full the June instalment they felt it would appear that there was not reason why she should not pay indefinitely. This seemed impossible in view of the Lausanne provisional agreement suspending the debts due to Britain. Important Points. Further payments would, therefore, have been necessitated, ending the Lausanne agreements and reopening the vexed questions of reparations and war debts, and plunging the world again into the uncertainty and despair from which it had been rescued by Lausanne, said Mr Chamberlain. These considerations seemed to outweigh all the others. On the other hand, the British Government felt the stronges. objection to any course placing it m the position of having to repudiate its obligations. The Governments view of the proper way to treat the June instalment was to consider it as merged in the body of the debt, upon which the Government was prepared to enter into formal negotiations as soon as they could be arranged. “We therefore decided to make clear that suspension of the June instalment did not and was not intended to prejudice an ultimate settlement,” said Mr Chamberlain. “We proposed to make a payment of 10,000,000 dollars in silver, which the United States informed us she would accept at 50 cents a fine ounce. We acquired this silver from the Government of India? lam sure Mr Roosevelt’s statement appreciating the spirit in which our proposal was made will give general satisfaction. This settlement of a difficult and delicate problem is a good augury for the success of the World Conference and may prove the first step towards a complete and final settlement of tne whole question of war debts. Sir Stafford Cripps, on behalf of the Labour Party, congratulated Mr Roosevelt on the realism with which he faced the situation. He also congratulated the Government on the satisfactory agreement. Sir Herbert Samuel said the Liberals joined in the congratulations. . It would have been lamentable if Britain had been forced into a position of repudiation. Sir Robert Horne (Conservative) said that the settlement represented, considerable alleviation of the country s burden, as he was sure Mr Chamberlain had acquired the silver below the price America was allowing. Mr Winston Churchill expressed admiration of Mr Roosevelt’s wise, generous words, which would give a message of hope to the whole world. Mr James Maxton (Labour) declared that things must be put in the proper perspective. We had simply induced a creditor to take something on account and obtained six months time in which the debt could be fully discussed. He hoped a real settlement would be found in that period. The British Note. A White Paper simultaneoulsy issued containing papers relating to the question. The British Note of June 13 stated that in the opinion of the British Government it was essential for the success of the Economic Conference that delegates should not be hampered or harassed by doubts about the possibility of a satisfactory settlement of war debts. The payment of a further instalment at this juncture would inevitably be judged to mean that no progress whatever had been made towards a settlement. The Government, therefore, proposed to make an immediate payment -f 10,000,000 dollars as an acknowledgement of the debt pending a final settlement, and suggested negotiations. The British Note proceeded: The treatment of inter-Govemment obligations must closely affect a solution of problems with which the World Con-

ference has to deal, because they cannot be separated from the influences which have brought the world to the present plight. For instance, it- is generally agreed that one of the first and most essential aims should be to increase the general level of commodity prices. It may be recalled that after the Lausanne Conference there v as a marked tendency for prices to rise, but this tendency was reversed when the prospects of a final settlement of inter-Governmental obligations receded, while the December payment was accompanied by a sharp fall in prices which was felt in America at least as much as in Europe. Experience, therefore, appears to show that the effect of these payments upon prices is very direct. “The United Kingdom Government had hoped the United States Government would have been able to accede to its request to postpone the payment of the June instalment pending a discussion on war debts as a whole. Since this does not appear to have been found possible, his Majesty’s Government is obliged to decide on its course of action. Such decision must in any case be of an extremely difficult character, and in considering it his Majesty’s Government has felt its deep responsibility, not only to its own people, but to the whole world, which is awaiting the deliberations and recommendations of the conference with the utmost anxiety. Grave Effect of Full Payment. “The conclusion at which his Majesty’s Government has arrived is that payment of the June instalment could not be made at this juncture without gravely imperilling the success of the conference and involving widespread political consequences of a most serious character. In its view the instalment should be considered and discussed as part of the general subject of war debts upon which it is anxious to resume conversations as soon as can be arranged.” In order to make perfectly clear that it did not regard suspension as prejudicing ultimate settlement, the Government then submitted the proposal whi9h Mr Roosevelt accepted. The United States in reply pointed out that power to reduce or cancel the debt rested with Congress, and suggested that Britain make representations in Washington as soon as convenient regarding a further discussion of the entire debt question.