SURFEITED WITH MONEY

Taranaki Daily News, 8 January 1927, Page 15

SURFEITED WITH MONEY

PLIGHT OF UNITED STATES TREATMENT OF ENGLAND. PROSPECTIVE TROUBLE. (From Onr Own Correspondent.) Wellington, Jan. 5. The United States is now very much on the map of the world, and the conditions in America have therefore a world wide interest. The United States is prosperous, “too prosperous,” says Mr. A. P. Felton, a prosperous banker of Massachusetts, and adds, “The very things that made us great will be our undoing.” There is no doubt about this. American wealth has enormously increased as the result of exploiting the Allies during the war, and particularly Great Britain, who had to sponsor American loans to the Allies, and when the time came for settlement America did not forget to exact her pound of flesh. Of course, she had a right to call upon her debtors to meet their obligations, and Britishers everywhere must be proud of the fact that Britain was the first to fund her American debt, and has since paid interest and sinking fund punctually on due date. And there were periods when the exchange value of the sovereign was considerably below the dollar parity. The steady and uncompromising adherence to meeting her financial obligations has won the admiration of eminent American bankers and financiers, and many of the leading New York papers have been fulsome in their praise of British financial methods, and this was particularly the ease when in May last the pound sterling reached gold parity for the first time in 16 years. It is but fair to say that Britain has had the cordial support and the full sympathy of the American financiers who have shown a remarkable willingness to help, but the American politician, whose ways are inscrutable, has been opposed to any leniency being shown to the debtor nations. Returning to the remarks of Mr. Felton, who, by the way, was one of the happy holiday-makers on the palatial liner Carinthia which visited Auckland and Wellington a few days ago, Mr. Felton says the Americans do not sense the value of their wealth, and unless they are very careful they will lose their anchorage. The greatest danger confronting the nation is extravagance, lack of sobriety, and lack of quiet, decent living. The symptoms displayed by the United States are just the same symptoms that would be displayed by an individual who has suddenly and unexpectedly acquired great wealth. The national inclination is to plunge into extravagance, and it is very hard to resist the desire. There is money to burn, then why worry ? THE CUMULATIVE EFFECT. America has had several indications during the past year that she is on the way to outdistancing the proverbial constable, but none of the events has been sufficiently large to cause any real disturbance. These events will, and must, have a cumulative effect. Mr. Felton agrees that it is quite impossible for the United States to go on selling and accumulating wealth. At some time or other she would have to buy more, and when that time arrives the pestiferous American politicians will be forced into a thinking mood, and be forced to change their tactics. So far as possible America has insisted that she sail be paid not in goods or services, but in sterling,' which adds to the burdens of the debtor nations and surfeits her existing plethora of gold. "Rigour” is too weak rather than too strong a descriptive epithet. Yet stress must be laid on the fact that Britain has not asked to be released from her bond; and it is because she has shown herself ready to meet her obligations that her credit' stands high in the world. Britain did offer to cancel the debts owing to her if the debts owing by her were also cancelled, but the American politicans would have none of this. Recently the professors at Columbia University petitioned the President to cancel the war debts, or, in the alternative, to agree to a substantial reduction, but the answer they received was that their petition was not helpful. Mr. Felton says there is no doubt that the United States is entering an era of strong competition, and there will have to be very large economies in living and wages and conservation of the things in which the Americans have been extravagant during the past few years. The nations indebted to the United States cannot pay in gold; they must pay in goods and services, if not direct to the United States, then through the countries with whom America has important trade relations. Gold will be used as far as possible in meeting debt payments, but the yellow metal is not wanted by American bankers, for it merely helps to spread extravagance. In the present year there is bound to be some very serious financial disturbances in the United States, ■ which may have far-reaching effect*;.