CAN GERMANY PAY HER DEBTS?

Timaru Herald, Volume CXXXVII, Issue 19836, 27 June 1934, Page 9

CAN GERMANY PAY HER DEBTS?

UNANIMOUS DECISION IN BRITAIN

NEW MEASURE PASSES PARLIAMENT

United Press Association—By Electric Telegraph—Copyright (Received June 26, 5.5 p.m.) LONDON, June 25. The House of Commons without division passed the second reading of the Debts Clearing Offices and Import Restrictions Reprisals Bill, the measure to deal with the situation created by the decision of the Reichsbank to suspend for six months, from July 1. all cash transfers on German long and medium debts abroad, including the Young and Dawes Loans. Mr Neville Chamberlain (Chancellor of the Exchequer) expressed regret thSt the Government found itself bound to introduce this measure. He said there was no doubt that the position of Germany in regard to the foreign exchange necessary to discharge her obligations was one of very great difficulty. In the German Note to Great Britain a great deal of emphasis was laid upon the reduction in the Reichsbank’s reserve of gold and foreign exchange, and it was said that this reserve had been sacrificed in an effort to maintain payment of German obligations. The fact was that a very great part of this serious diminution in the reserve had been due to a device adopted by the Reichsbank, which, in its effect, was equivalent to depreciation of German currency.

Rightly or wrongly Germany's creditors of all countries no longer felt the confidence they once had in the good faith of Germany. In the British Note it was made clear that the door was still open for further negotiations and the German Government was invited to send representative to London for discussions, in the hope that it might be found possible to avoid using the powers which were sought in the Bill. He was happy to say that this offer had been accepted, and he sincerely hoped it might be found still practicable to make some arrangement with the German authorities which would ensure fair treatment for British bondholders and British traders before July 1. All the same the Government could not postpone its request for the necessary powers in the hope of a solution which might, after all, be found impossible, and he asked that the Bill be passed through all its stages so that if it should prove necessary the Government might have power to put it into force to see that British nationals were fairly treated. In regard to the provisions of the Bill the Chancellor said the Government did not like quotas. It had no present intention of imposing quotas and it must hope that it would not be necessary to use the powers contained in Clause 2.

Although he had spoken only of differences with Germany in this matter and although, in fact, it was only urgent difficulties that had caused the Government to introduce the Bill, Clause 2 was not confined to Germany and was drawn in such terms as would enable it to be applied to any other country if the need arose. Mr D. R. Grenfell (Labour) regretted the necessity for the Bill. Sir Hubert Samuel (Leader of a group of Liberals) agreed that Germany had not acted rightly. There was no justification for the German default.

SUBSTITUTES FOR RAW MATERIALS. SUCCESS OF GERMAN RESEARCH. United t J rt Association - By Electric Telegraph —Copyright BERLIN, June 25. Herr Frowein, director of the Bemberg Artificial Silk Company, announced discoveries permitting Germany to eliminate raw material in the manufacture of films and textiles. One material offers a useful addition to woollen fabrics. Both are produced by an ammoniac copper-oxide process. Herr Frowein disclosed that the new fibre alone, or with a small mixture of wool, makes a new, serviceable material, to replace wool. Tests carried out at leading German wool combing and worsted yarn spinningmills, resulted in a mixed wool material from the new fibre, which is meeting with a reasonable demand. Efforts are being made to technically perfect the fibre, which already gives greater resistance to damp and increased wearing resistance. Two or three tons are being produced daily. Herr Frowein hopes it will soon largely replace wool.