INTEREST CUT

Southland Times, Issue 22203, 21 December 1933, Page 5

INTEREST CUT

GERMANY’S DEBTS

HIGH-HANDED ACTION OF DR. SCHACHT BRITISH CRITICISM (British Official Wireless.) Rugby, December 19. The Central Committee of the Reichsbank announced yesterday a curtailment during the first six months of next year of cash transfers in respect to interest payments on Germany’s medium and long term debt from 50 to 30 per cent. The interest on the Dawes and Young loans will continue to be transferred in full, but no amortization payments will be transferred, except on the Dawes loan. The Times, commenting on this further default, says: “Altogether the impression left by Dr Schacht’s handling of the debt question is anything but favourable. It is idle to pretend the Reichsbank and the Government are powerless to effect any increase in the available supply of foreign exchange, for these could without question be stimulated by appropriate measures. Indeed, it seems quite clear that if they really desired to do so Dr Schacht and the Government could very well continue the payments, at least on the present scale, without inflicting any hardship upon the German people. Throughout the negotiations Dr Schacht displayed a high-handed disregard of the legitimate claims of foreign creditors which it is difficult to reconcile with perfect good faith and his preferential treatment of the Swiss and Dutch claims. In particular he has introduced arbitrary discrimination which no amount of sophistry can justify.” The Morning Post says: “The view is strongly held in this country that no debtor has the right to discriminate in this arbitrary fashion between his creditors. The British Government has already addressed a remonstrance to Berlin without any apparent result, but it ought not to let the matter drop. Foreign bond-dealers have strongly protested to the committee of the Stock Exchange against Germany’s default, severely criticizing the German policy of using funds which should go to pay interest to buy German bonds at knockout prices in London with a view to their concellation.