BURDEN OF DEBT

Taranaki Daily News, 21 December 1931, Page 5

BURDEN OF DEBT

BANKERS’ VIEWS DIFFER

•INCREASING UNREST CAUSED’ OPINIONS OFFERED SENATE “SITUATION EXAGGERATED” MORATORIUM RATIFICATION REVISION A SEPARATE BILL By Telegraph—Press Assn. —Copyright. Rec. 6.50 p.m. Washington, Dec. 19. The heavy yoke of war debts was causing increasing unrest in Germany and to force as yet unborn generations to bear a burden for which they were not (responsible would bring rebellion, said Mr. Mitchell, president of the National City Bank, in giving testimony to-day before the Finance Committee of the Senate, which is investigating the position in connection with’foreign securities held in America and bearing on debts and the moratorium.

Mr. Mitchell declared he was not preaching a doctrine of cancellation, but he agreed |hat only a miracle could avert the necessity for a further moratorium at the end of the present one.

Discussing foreign loan flotations, Mr. Mitchell said the National City Bank had handled about £214,371,000 in bonds since the war and on these it had made a net profit amounting to £2,678,500. It had also participated in the syndication of £6’52,081,400 in foreign securities, on which its net profits had amounted to £2,292,700.

Mr. Lamont, of J. Pierpont Morgan and Co., giving evidence yesterday said the seriousness of the German situation had been exaggerated beyond the realm of common-sense. Ninety per cent, of the American banks participated in financing Germany and, though there was a cumbersome amount of short-term German credit in the United States, it really did not endanger American banks. ,

The largest holding was £4,000,000, Mr. Lamont said, and the bank which held that was so large the sum did not constitute a menace. Morgans alone had floated loans .totalling £340,000,000 for 16 foreign governments since the war. Of this huge total £275,000,000 was still outstanding. France had borrowed £60,000,000 and had repaid nearly half.

The Hoover war debt moratorium was approved by the House of Representatives to-day by 317 votes to 100. It will go to the Senate for completion of the ratification. An amendment was included placing on record that the House was opposed to cancellation or reduction of Europe’s war debt to the United States. The administration has proposed debt revision as a measure separate from the moratorium.