WAR DEBTS

Waipa Post, Volume 45, Issue 3212, 4 August 1932, Page 7

WAR DEBTS

Commenting upon Mr Hoover's disarmament proposals, the Financial Times remarked that their association with the war debts question was misleading. " ' If Europe can afford to spend so much money on its fighting forces it can afford to pay its debts to us,' is the theme which has hitherto been the one link between debts and disarmament; but it tells only one-half of the story. One of the clearest lessons of the present crisis is that there is a very broad distinction between providing the local currency sufficient to pay foreign obligations and transferring the requisite sums abroad in the currencies in which payment is due to be made.

" Such a . difficulty was envisaged long since in regard to Germany's reparations payments. It has cropped up frequently in the last year or two in regard to loans made in the ordinary course of business to countries in South America and elsewhere. It hah played no small part in bringing about the accumulation of most of the world's gold in a few centres, aggravating the troubles due to other causes. The fact that debtor countries may be brought to spend less on their navies or their armies, therefore, will do nothing to facilitate payment to their creditors."