SACRIFICES BY BRITISH

Taranaki Daily News, 7 June 1934, Page 5

SACRIFICES BY BRITISH

CONTINUANCE IMPOSSIBLE REASONS FOR THE DECISION TAX BURDEN ON PEOPLE OBLIGATIONS BREAK DOWN British Wireless. -Rugby, June 5. The British war debts Note to America, which contains several striking passages, says that nothing has since occurred to cause the British Government to change its views expressed in the Note of December, 1932, when reasons .were given for the belief that the existing system of winter-governmental war debt obligations had broken down. In respect to war advances totalling 4,277,000,000 dollars, payments totalling 2,025,000,000 dollars had been made to date by the British Government to the United States. Yet the nominal amount of the debt still outstanding amounts to 4,713,785,000 dollars. Meanwhile, in respect of war advances totalling 5,773,300,000 dollars made by the United States to other European Governments, the aggregate payments made to date amounted to only 678,500,000 dollars. Thus though the war advances to these other Governments exceeded by onequarter the advances made to the United Kingdom the payments by the United kingdom amount to three times what the United States received from those other Powers. ADVANCES TO THE ALLIES. On the other hand, while Britain borrowed 4,277,000,000 dollars from the United States Britain made war advances to the Allied Governments totalling 1,600,000,000 at par. vßut whereas the United States received very substantial payments against the domestic charges involved, the British Government has had to meet the domestic charges of its war loans to the Allied Governments in full, as it had paid to the United States all it had received, both from war debts and from war reparations, and had in addition paid nearly.as much again out of its own resources. “If the United States feels the burden of its war advances of 10,050,000,000 dollars, against which it has received 2,703,000.000 dollars, how much heavier is the burden of the United Kingdom, which with one-third of America’s population has had to meet the full charges of its war advances of 7,800,000,000 dollars without any net receipts against these charges and had had in addition to make large payments out of jts own resources in war debts to the United States,” the Note states. The Note points out that Britain suspended the claims on her debtors in the hope of a general decision, but could not contemplate a situation in which it would meet its war obligations to others while continuing to suspend payments due to them. UNPRECEDENTED SACRIFICES.

As to Britain's improved Budgetary situation, this was due to unprecedented sacrifices made by the British nation. Since the war taxation had been higher in Britain, and for a considerable period twice as high as in the United States, including all the Federal, State and local taxation. In order to ,restore national credit in 1931 the British people accepted further heavy increases in taxation, ac-. companied by a rigorous control of expenditure and cuts in salaries and allowances of all kinds; and, despite all these measures, the Budget would again have shown a deficit last year had. it not been possible to secure by conversion operation a reduction in the fate of interest paid on a large proportion of the public debt. This enabled the Government to remit part of the emergency sacrifices imposed in 1931 and restore wage cuts on salaries and the whole of, the cut in unemployment allowances, a continuance of which was imposing a severe strain on the national conscience. It would have been a gross. act of social injustice to have denied this relief to the British people in order to pay war debts to the United States while suspending the war debt payments due to the United Kingdom. “These inter-Gbvemmental debts,” says the Note, “are radically different from commercial loans raised by foreign Governments on markets for productive purposes. War debts are neither productive nor self-liquidating, and the unnatural transfers required for their payments would involve a general collapse of normal international exchange and credit operations.”