The Daily News. MONDAY, FEBRUARY 5, 1923. WAR DEBTS FUNDING.

Taranaki Daily News, 5 February 1923, Page 4

The Daily News. MONDAY, FEBRUARY 5, 1923. WAR DEBTS FUNDING.

The annouhcenfent that the British Government has accepted the proposals of the United States’ Debt Commission for the funding of the British war debt, while ending the controversy on this important matter, is likely to evoke a feeling that America has made a more harsh bargain than circumstances warranted. It is, however, certain there will be appreciable feelings of relief that the negotiations have ended in an agreement, even though manifestly to the advantage of the United States. “What Britain has done,” states the New York Tribune,” is to point the way of honor and solvency to all other nations who wish to struggle up out of the pit of their war indemnities.” It is to he feared that, so far as ean be judged at present, Britain will still point the way for some years to come, before all other nations follow in her footsteps, blit that kind of policy has ever been Britain’s metier. As to the terms, if they are those mentioned in a cablegram from New York on January 2(5, they include retrospective interest at 4J per cent, (instead of the five per cent, previously charged) from the dates the obligations were contracted to the date of the completion of the funding arrangements; the interest rate for the first ten years after funding to be three per ceut., to be increased to 3| per cent, thereafter, and the total debt to be liquidated in sixty-two fears; provision for amortisation by yearly payments of principal, the amount for the first ten years being approximately one-half per cent, of the entire principal. The suggestion of the British Commission was that the interest rate from the date of contracting the debt up to the time of funding should be 2j per cent., and thereafter three per cent. In reality this proposal was as much as Britain was justified in undertaking, while the amount proposed by America means a general average of approximately less than four per cent., which is the rate the United State’s pays the holders of liberty bonds and of other internal war loans, the extinction of which would have been possible by utilising Britain’s payments for that purpose. It is stated that rhe payment of three or three and a-half per cent, by Britain would amount to about thirty millions sterling per annum. It would seem that the British Government has been convinced that, at least for the time being, there was no hope of more favorable terms being obtained, though there is just a possible chance that at no very distant date America may be persuaded to review the transaction with greater sympathy and moderation. That Britain has taken the right course in accepting the American terms is beyond dispute, and though fulfilment will involve another heavy burden on the people of the Motherland a move has been made to liquidate one of the heavy debts hanging round the neck of the country. Moreover, Britain ean now justly call upon the United States to actively participate in the effort to secure peace and restore the economical status of Europe, while she can also rightly call upon her debtors to follow her example, making the terms sufficiently easy to enable regular payments to be made. There is some force in Mr. Lloyd George’s contention that the fraction of percentages is not comparable in value to a good understanding between these two great communities, on whose co-operation peace, freedom and international justice depend.