HER OWN BONDS

Taranaki Daily News, 30 November 1932, Page 8

HER OWN BONDS

AMERICA AND WAR DEBTS. REPAYING HOLDERS. Behind the American attitude to the payment of war debts lie certain factors which the average foreigner is inclined to ignore. Of these, according to Mr. Norton Clapp, an American lawyer from Tacoma, Washington, the chief one is the fact that the American Government has to 'meet the war debt to its own people, who subscribed to bond issues which have to be redeemed. Failure to regard this aspect of the Federal Government’s position has led, in Mr. Clapp’s opinion, to America being misjudged by certain Australian newspapers. He discussed it with The Dominion bn his arrival from Sydney by the Maunganui.

What aggravated the position, he said, was that the Government had to make immense expenditure to cope with the American internal situation. Unemployment was being met very largely through private and public support, and by local relief on the principle that the men had to work for what they got.

“We are very much afraid of the dole,” Mr. Clapp said.

Road-making schemes and other public works were absorbing great sums of public money, and for the relief of banks large funds had been provided. The aim had been to make the banks’ resources more liquid. Certain mortgages were being taken over and measures introduced for the relief of mortgagors. The Government had been hard pressed, and had been “having a terrible time balancing the budget.”

“On top of that,” said Mr. Clapp, “it has been buying off the war debts held by the people. The American nation is up to its ears in debt. When we were paying for that war we went right down into the pockets of the people. Rich and poor alike bought bonds. So the debts are not held by the • Government, but by the people. However, I think there is a feeling among the people of the country that if they can get some reasonable assurance from the rest of the world that armaments will be limited there will be a greater chance of war debts being cut down. “At present it is an unfortunate fact that 90 per cent, of the Federal taxes have to be used in paying for wars, past and future. If that could be brought down it would be a relief.”

In concluding, Mr. Clapp mentioned the possibility of conversion for some of the Government issues. The credit of the Government still stood high, as had been proved when a loan was floated some months ago at a very low rate. The fact, was, of course, that the Government had been almost the only thing with which investors felt secure. Nevertheless, the Government would have to I meet large payments to people who held bonds subscribed to during the war and j maturing next year.