FINANCIAL OUTLOOK

Taranaki Daily News, 24 August 1931, Page 5

FINANCIAL OUTLOOK

RATION’S DEBT BURDENS

oENERAL REMISSION URGED. BRITAIN’S CHANGED POSITION. . “When are .things going to get better?” was a question put on. Friday to Sir Harold Beauchamp, of Wellington, who is visiting Auckland. .His reply was: “That depends firstly on the United States and secondly on Great Britain. It is to those countries we must look before we will see a rise in the financial barometer. As far as New Zealand is concerned we are a mere handful of people and we can scarcely do anything that will assist in restoring the financial equilibrium.” Sir. Harold Beauchamp said’ that on his return from England in the early part of 1920 he had expressed the opinion that the quickest way to restore financial equilibrium was a general remission of the debts of the various nations. ' At that time roughly £1,600,000,000 was due to England from the Allies, since reduced to about half '■ that amount. He had said that if that sum were written off and the United States freed Great Britain from her indebtedness to the States, commercial and industrial activity would speedily follow.. t VIEWS OF EMINENT MEN. “I do not say it was an original idea on my part,” he added. “It was one held by financiers in London at that time.. The United States, however, knowing that Britain would stand up to her financial obligations, did not listen to the suggestion. About two years later the Earl of Balfour published his famous Note making a similar suggestion and that has been followed by pronouncements by the Bishop of London and the Hon. Alexander Shaw, the deputy-chairman of the P. and O. Steam Navigation Company and a director of the Bank of England, showing that it is being more than generally recognised by eminent men that countries staggering under such a weight cannot recover unless something is done in the direction indicated. “Showing how the wind blows, we have the recent gesture of the President of the United States, Mr. Hoover. I look upon that as the first step to bring about more liberal terms than thos< originally made.” , • . CAUSE OF THE DEPRESSION. To the question, “What is the cause of the present depression?” Sir Harold replied: “The vast/amount of money that was wasted during the Great War and the alteration in the position of Great Britain.” Britain, he said, was formerly the greatest creditor nation and out of her annual savings she waa able to advance to other countries from i £250,000,000 to £300,000,000 a year. Through those advances she was able to gain a large amount of reciprocal trade by supplying manufactured goods to many countries and receiving raw products in return. But at the close of the war she became a debtor country and had to face a public indebtedness of approximately £7,500,000,000. Before the war Great Britain’s national debt was roughly £700,000,000, the annual interest on which, at 5 per cent., would fie £35,000,000, whereas the interest on the national debt to-day was £303,000,000. In addition to this great burden Great Britain had undertaken many social services which involved a great strain upon her finances. There was, for instance, the amount, in the vicinity of £115,000,000,' required for the dole last year. SmaF wonder that Britain was tempdrarilv in a crippled condition and was casting about for a re-arrangement of her finances to enable 'list to carry out her liabilities. BRITAIN’S GENEROSITY. It had been estimated by a competent authority, that during the past 60 years Great Britain had written off about '£4,C00,000,000 in. loans ghe has made to various countries. With that experience before them, it was scarcely to be wondered that the United States and Prance, with their total gold holdings of [£1,400,000,000, which was more than half the visible gold bullion in the •world, would not advance money to Countries that were not credit worthy. ' ‘Sir Harold said it was possible that ■with a change of Government in the .United States, the Democrats might feel . inclined to lower substantially the present tariff which debarred many debtor nations from discharging interest payment. in kind, and, at the same time, adopt a more liberal policy in the matier of external loans.