“DEFAULT DISASTROUS”

Taranaki Daily News, 30 November 1932, Page 7

“DEFAULT DISASTROUS”

ADVICE OF BANK GOVERNOR

NOTE READY FOR DESPATCH

PART PAYMENT SUGGESTED

PAPER URGES TRADE LIMIT

By Telegraph—Press Aesn.— Copyright.

Rec. 7.40 p.m. London, Nov. 29. The British debt Note is ready for despatch to the United States by cable not later than Wednesday, says the Daily Telegraph. According to the Daily Herald, Mr. Montagu Norman, governor of the Bank of England, told the Government that default would be disastrous to British credit. The Herald’s City editor believes the plan now favoured is payment of the interest instalment, equivalent to £13,500,000, at par (£21,000,000) at the current rate of exchange) and a request to the United States for postponement of the capital payment of £6,160,000 at par (£9,000,000 at the current rate). It is understood as regards interest that Mr. Norman suggested payment partly in gold and partly in dollars, mainly the former.

The Daily Express to-day displayed a front-page story demanding a reduction of British purchases of American goods to the extent of £60,000,000 needed to pay the debt instalments in December and June, pointing out that Britain in 1931 bought £104,000,000 worth of American goods and sold her on£f £17,000,000 worth.

The paper says this adverse balance made it impossible to buy dollars to meet the debt. Among the items of American products the paper suggests Britain can do without the paper includes motor-cars (£4,400,000), radio apparatus (£700,000), apples (£4000), iron and steel manufactures (£1,400,000), meat products (£6,700,000), animal oils and fats (£6,700,000), rubber manufactures (£950,000), 1 manufactured wood (£1,700,000) and barley (£1,500,000). The paper also emphasises that the drop in sterling in the past fortnight has increased the cost of the December debt instalment by over £1,500,000.