BURDEN OF DEBT

Taranaki Daily News, 21 November 1932, Page 7

BURDEN OF DEBT

BRITISH DUES TO STATES

ADVERSE TRADE BALANCE

DEPRESSION OF STERLING

OF LOAD

SUGGESTION FOR PAYMENT

By Telegraph—Press Assn,—Copyright. Rec. 12.30 a.m. Lndon, Nov. 20.

Trade figures for ten months suggest Britain is likely to be faced with a heavier adverse balance than in last year. Tire Financial News estimates that the excess of imports of merchandise is £330,000,000 partly offset by invisible exports including shipping, income, from overseas investments and commissions totalling, £240,000,000. The adverse balance is thus likely to be £90,000,000 compared with £75,000,000 in 1931. The figures reveal the impossibility of a regular resumption of American debt payments. Uncertainty in this connection has depressed the markets all the week and caused a renewal of the fall in sterling. The December payment equals four years’ British exports to the United States. The pewspaper Economist suggests that the existing obligations should be replaced by a fresh issue of bonds limited to the amount the debtor Governments could safely float in America and involving a reduction of war debts equivalent to that in the Lausanne reparations annuities. The paper adds: “The American financiers, administrators and Press realise the impossible position; the public alofife refuses to face the realities.” sterling receded to 3 dollars 27J cents, the lowest point of the year, due to fears that payment of the war debt in December would deplete the exchange equalisation fund, rendering the authorities unable to support the pound, which would fall to a lower level. Heavy seasonal payments on cotton and wheat contributed to the decline. Later there was a sharp recovery to 3 dollars 29 cents. The franc rate also,, improved from 83 5-Bto 84. FEELING IN UNITED STATES “MORE RIGID ATTITUDES CHANGED VALUES OF DEBTS Rec. 63 pm. Washington, Nov. 19. Political forecasts indicate that when President .H. Hoover and Mr. F. D. Roosevelt, President-elect, informally discuss foreign war debts on Tuesday the prevailing atmosphere will be against a further moratorium or reduction. From the highest administration sources has come wdrd that the President is definitely opposed to another year’s moratorium, and that he prefers the adoption of an attitude more rigid than the continued suspension of payments requested by Britain, France and Belgium. In like manner, Mr. Roosevelt has declared against cancellation, while he has been silent on the requests for a reexamination of the debt problem. Prominent Democratic legislators have joined the Republican leaders in declaring afninst. the suggestion of an extended moratorium. “Measured by what they could buy with money in their own countries, the real cost of the war debt payments has increased by 87 per cent, in the case of the British taxpayer and has decreased by 30 per cent, in the case of the French taxpayer since the funding agreements were made, while the real value of the payment to our Government has risen 43 per cent,” a New York Times financial article to-morrow will state. “The percentages are calculated by comparing the present currency exchange rates, costs of living and other aspects.