The Daily News THURSDAY, DECEMBER 15, 1932. THE NEXT PHASE.

Taranaki Daily News, 15 December 1932, Page 4

The Daily News

THURSDAY, DECEMBER 15, 1932. THE NEXT PHASE.

OFFICES: NEW PLYMOUTH, Currie Street. STBATFORD, Broadway. HAWERA, High Street.

The further the discussions in regard to war debts and* reparations proceed the plainer it becomes that the payment to be made by Great Britain to-day is likely to be the last under the existing agreement with the United States. The British request for postponement of that payment having been refused it went without saying that the nation’s undertaking would be honoured. To do so will undoubtedly add to the difficulties and anxieties of the United Kingdom, but they will be accepted as part of the burden leadership among the nations entails, and will be applied as a stimulant to fresh effort. Nevertheless, there is a limit to the capacity of Great Britain to carry a liability in circumstances unforeseen when it was accepted and which are unique in the history of civilisation. That is a factor which no amount of national pride or tradition can overcome. It is one that must be taken into account by Great Britain’s creditor unless the United States is prepared to see the financial edifice of Europe shattered to the ground. The figures submitted by the Chan-

cellor of the Exchequer to the House of Commons on Monday showed once more how inequitably the arrangement with the United States has worked out. Based on the supposition that reparation and repayment receipts would square the payments to be made to Washington, the agreement has actually left Great Britain to the bad, and the ratio of loss will increase each year the agreement remains in force. All this has been placed before the United States, but so far with little avail. Judging by latest messages from. Washington there appears to be a dawning recoghition of the fact that it is sometimes good business not to enforce a claim even though debtor and creditor alike agree that its legality is unquestioned. Great Britain has warned the United States that to-day’s payment must inevitably reduce British resources and limit Great Britain’s capacity to purchase American exports.- The warning has been unheeded at Washington, but the result forecasted by the United Kingdom will be too insistent to be ignored. The whole of the economic system of the United States depends upon an ever increasing oversea trade. Competition with other exporting countries, particularly with Great Britain, has been made easier for the American manufacturer because his home market has been preserved for him by a system of high tariffs. During the last two years the export trade of the United States has languished. Former customers have developed home resources and have set themselves to preserve their home markets for local manufactures. Even in Great Britain the former open market has gone, although the United Kingdom still remains One of the largest importers of American manufactures and food products. But the indications are plain that the markets of Great Britain are to be conserved for Home and Empire production, particularly as such intraEmpire trade will be based upon a system of interchange of commodities wherever possible. The United States has hitherto demanded payment for its exports chiefly in gold, and the supplies of gold are drying up. The process of exhaustion, in Great Britain at all events, has been accelerated by the heavy payments of war debt with no corresponding receipts to make good the loss. Unless this drift can be arrested a further falling away of trade between Great Britain and the United States is inevitable, and it is satisfactory to note that this is beginning to be realised by American politicians. Before the next payment becomes due a new Administration will be in charge at Washington. It will represent a complete change of view of the electorate upon many domestic concerns, and it is stated that there will be no hesitancy in undertaking the legislation necessary to give effect to the altered opinion of the nation. For the sake of world-wide recovery, in which the United States must be as interested as any European State, it is to be hoped the new Government of the Republic will show equal courage in amending what is unfair or impolitic in its international relationships. As far as Britain is concerned, the United States has briefly announced that her debtor has agreed to pay, and the matter is now closed. That happy position, from the standpoint of the United States, is scarcely borne out by latest developments on the Continent. The overwhelming defeat of M. Herriot’s motion that the payments to the United States be made, with reservations, and the consequent resignation of the French Government, the fact that Belgium has definitely stated she is unable to pay, and the expectation that Poland will follow suit have forced the position. It will be interesting to see the reaction across the Atlantic.