OFFER BY NEW ZEALAND

Taranaki Daily News, 21 December 1932, Page 7

OFFER BY NEW ZEALAND

ACCEPTANCE NOT EXPECTED

THE MEANING OF LAUSANNE

AGREEMENT MUST CONTINUE

APPRECIATION OF SPIRIT

By Telegraph—Press Assn.—Copyright. Rec. 10 p.m. London, Dec. 19. The British Government will to-mor-row, it is understood, despatch a reply to New Zealand’s offer to resume war debt payments, indicating deep appreciation of the magnificent spirit shown, especially in view of New Zealand’s own budget problems, but it is likely to suggest that the question remain in abeyance pending negotiations with America. The position is that Britain neither asked nor expected the Dominions at present to resume the payments. The situation is precisely as previously stated, but it is apparently necessary to reiterate the position owing to cabled suggestions that Australia also is contemplating the resumption of payments. The crux of the situation is the Lausanne agreement, which some Dominion opinion confuses with the Hoover moratorium, notably in the case of New Zealand's offer. It was agreed at Lausanne that the Dominions would not be treated less generously than foreigners if the question of payment arose. Britain is not desirous of disturbing the Lausanne agreement owing to the repercussions such action would have in Europe. She hopes for an early discussion with America, pending which the Lausanne agreement must continue.

Commending New Zealand’s honourable debt gesture, the Morning Post remarks there is no war debtor more deserving of relief and none readier to make every sacrifice rather than dishonour its. bond.

“It is an unselfish offer from a Dominion gallantly* struggling through the depression,” says the Times. “The same attitude is taken by Australians although they abstain from making a formal offer pending a review of the whole situation. The attitude of these Dominions is welcomed as another proof of their | high courage and generous comradeship.”

THE ATTITUDE OF AUSTRALIA. IMMEDIATE ACTION NOT NEEDED. Rec. 10 p.m. Canberra, Dec. 20. New Zealand’s offer to resume liability for war debt payments in no way involves Australia in immediate action. The next Australian payment does not fall due until March 31. Official circles express the opinion that owing to the uncertainty of the world position and the possibility of some future arrangement between Britain and the United States any decision upon the subject at present would be premature.

THE FUNDED WAR DEBT OUR PAYMENTS TO BRITAIN. ANNUAL PAYMENT £1,650,000. At March 31, 1922, £27,532,164 of New Zealand’s public debt was owing to the British Government, all but £1,191,919 of this being on account of war expenditure. Arrangements were made with the Imperial Government in 1922 for the funding of this debt; The funding was carried out on an annuity basis of 6 per cent., the total payment each year being £1,651,930. Interest is at the rate of £4 19s 5.88 d-per cent., the balance of the 6 per cent, going to reduction of the debt. The first half-yearly payment of £825,965 was made to the British Government on December 1, 1922. The diviison between interest and principle in the payments made during each year has been as follows:—

•Half-year only. £200,000 additional, paid off Naval Defence loan. Under the agreement the original amount of £27,532,164 will be automatically discharged from the public debt by the end of the financial year 1958-59, but this date is subject to variation in accordance with the offer of postponement made by the Imperial Government The amount payable for amortisation will gradually increase each year as the interest payment reduces on the lessening debt. For 1931-32, £447,567 of the amount payable will be in reduction of the debt as compared with £292,964 in 1923-24, interest payable annually having already been reduced by over £160,000. An important condition of the agreement with the British Government is that the whole or any part of the funded debt may be redeemed at any time. This condition was taken advantage of when on December 1, 1924, £200,000 was paid off the naval defence

loan. A 4 In his Budget delivered on October 4 the Prime Minister announced that: “Great Britain has again extended a helping hand by consenting to postpone for another year all payments due on our funded war debt, and certain other debts due to the British Government. The additional relief to this year’s Budget is £825,000, in addition to which a saving of £47,000 will accrue to the State Advances Office. Our grateful thanks are due to the Mother country for this substantial measure of assistance during the acute period of our troubles.” New Zealand under the Hoover moratorium has already been excused two half-yearly payments of £825,000 each, due on December 1, 1331, and June 1, 1932. The further saving to which the Prime Minister refers is in respect to the payment due on December 1, and presumably Britain’s offer of suspension for “a further year” also covered the instalment due on June 1, 1932. In effect, therefore, New Zealand is offering to reassume liability to pay £1,650,000 although granted a postponement by Britain. ■

Year Balance of ended ' debt outMarch 31 Interest Principal standing. *1923 .... . 084,794 141,171 27,390,993 1924 .... 1,358,966 292,964 27,098,029 1925 .... 1,344,212 507,718f' 26,590,311 1926 .... 1,318,641 333,289 26,257,022 1927 .... 1,301,856 350,074 25,906,948 1928 .... 1,284,224 367,706 25,539,242 1929 .... 1,265,706' 386,224 25,153,018 1930 .... 1,246,254 405,676 24,747,34? 1931 .... 1,225,822 426,108 24,321,234