The Timaru Herald. SATURDAY, APRIL 11, 1925. THEN AND NOW.

Timaru Herald, Volume XCVIII, Issue 18084, 11 April 1925, Page 8

The Timaru Herald. SATURDAY, APRIL 11, 1925. THEN AND NOW.

Mention is made in the cabx> messag-es this morning of a period in tiie financial history tf America which White House prefers should be forgotten. Some, exceedingly unwelcome questions are being asked, in the House of Commons as to the attitude of the United States Treasury regarding repudiation, not by the Allies but by earlier Americans. Shown the reports of the discussion in the Imperial Parliament, following the question whether steps were being taken to secure reimbursement to' Englishmen who bought Confederate State bonds, the United States Treasury officials) stated that there was nothing the Federal Government could do as no record of the financial affairs of the Southern States during the Civil War were available. “The question crops up periodically,” the American apologists say, in attempting to dismiss all discussion. on such an unpalatable topic. Those picturesque days and conditions have developed into the present-splendid era. To-day it is evident that the vast majority pi t the American nation desires to insist in the words of the Republican platform that “Great nations cannot recognise or admit the principle of repudiation. To do so would undermine the integrity essential for international trade, commerce or credit. ” No one contests this view, - but what of American history P Of course there are no records of the financial affairs of the -Southern States! This is the American version of the story which White House desires should not be told. Nevertheless, British and European investors have a rigjit to demand, now that the United States has reached mature stature in thw possession of wealth, that their claims be recognised. But ".he high officials of the United States Treasury would rather discuss any topic under the sun, than recount the story pf American progress which discloses one of the most colossal and dramatic ironies in history; for the story would carry the observers through the vistas of- economic triumphs, backwards to the decades immediately following the Civil War, of which White House now says there are no records! In those difficult aqd uncertain days, the United States was then a debtor .nation, and perhaps like some of the newer aristocracy, now desires to avoid any discussion on their : lessprosperous and less showy past.. But the Americans roust face the music, in view of their bitter criticism of France and tire other Allies who cannot pay their Svhr debts! Hence the United States should be reminded_ of the inglorious past ;of . American reptidiators, since' according to “the North American Review“ of 1884, twelve of the great commonwealths of: what is now the United States, containing one-quarter tf her population, had been guilty of repudiating on the flimsiest of pretexts State bonds,/held largely by British and European investors to an amount exceeding sixty million sterling. In every quarter of the country, to quote from the same eminent authority, “the black flag of repudiation” was being hoisted—by r< unicipalities, townships, and county authorities, as well as by the Southern Sjtivtes. , t The Amount of dishonoured State' bonds the North American Review estimated in that year to be Alabama ...... £7,762,400 Arkansas 4,161,400 Georgia ...... 2,716,000 Florida ..... 1,056,000 Louisiana .... . 6.423,000 Minnesota 1,192,000 Mississippi .... 4,520,000 North Carolina . . 9,670,000 South Carolina . . ' 3,900,000 Tennessee . . . .■ .5,070,000 "West Virginia . . 14,445,000

£61,815,800 Tlie Ileview added many pages of picturesque narrative describing now these States defrauded tueir creditors; how Georgia*—which l.y the way lias to-day on the Aruencau Debt Funding' (Jcmmission a representative witn very stern and insistent views on the Allied Debts—appointed a, commission "made up entirely of her own citizens/" who without according' even a healing” to the investors cast aside “bonds representing millions of money"’; ho\ Arkansas “lifted a great burden from its shoulders'" by depriving those who invested in her railways and levees (river embankments; of millions of dollars, on 'he ground that a technical formality nad been omitted when the bond issue was voted; how compelled her creditors to accept titty cents per dollar by telling them through her Governor that if they refused “then the bondholders may rot”; bow Louisiana after inducing the bondholders to accept sixty cents per dollar changed her Constitution to enable her to reduce the rate cf interest, to two instead of four per cent.; how South Carolina passed an “Act to lteduce the Volume c t the Public Debt.” and funded :he remainder at fifty cents per dollar; and bow North Carolina in 1879 issued new bonds for old at. one-quarter of the face value. Other authorities describe bow Virginia after “readjusting her debt” mnv times in two generations finally settled at the rate <.f £3BOO for, every £5600 that coni-’ be discovered in 1891 and issued new bonds “payable, in one hundred years with interost. at the -ate of two per centum for the irst ten years and three per •onturn thereafter.” Many obserof America’s amazing prnsrilv and of the contrast between be. views of her legislators as

creditors and debtor's cannot but be struck by the insistence of the North American Review, in 1884, that practically all t;f the repudiated debts were incurred for constructive and that the prosperity of the defaulting States was such as to enable them to meet their obligations with ease. The reviewer accuses the pongrass and Administration of his day < i aiding and abetting the repudiators in every possible _ way. He also insists that the United States Government ought in equity to have assumed responsibility for the debts. What, however, is eve*, more interesting to the student r.-f historical ironies is the response of the American Press of the time to his arguments. Its comments are full of the most delightful pleas for repudiation. To-day, the proudly rich Americans are insisting that to admit the principle (f repudiation would undermine the integrity essential for international trade, - commerce and credit.” Despite the enormity of her,financial burdens and the grim harvest she g’amerod from the cataclysm of 1914-1918, Great Britain stands solidly _ for the principle of non-repudiation of war debts. Hence her amazingly strong financial position, and her impregnable credit. Nevertheless, is jt asking too much of the extraordinarily rich people of the United States to suggest that ihe unpalatable sauce they insist on serving to the hungry geese of Europe, should be similarly administered to the well-ied maj esti c ganders of their own country!