ACCUMULATION OF DEBT

Wanganui Chronicle, Volume 74, Issue 146, 23 June 1931, Page 7

ACCUMULATION OF DEBT

BALFOUR NOTE RECALLED . .PPORTIONIMENT OF RELIEFLIABILITY OF GERMANY The debt postponement proposed by Mr Hoover recalls the offer by the British Government, in the Balfour Note of August, 1, 1922, to write oil' : through one great transaction the whole body of inter allied indebtedness. Failing the accomplishment of this objective. Air Balfour wrote: “We wish it to be understood that we do not in any event desire to make a profit out of any less satisfactory arrangement. In no circumstances do we propose to ask more from <»ur debtors than is necessary to pay our creditors. And. while we do not intend to ask for more, all will admit that we can hardly be content with less.” That policy has been maintained by Britain ever since. For a considerable period her receipts were substantially less than her payments to the United States. An official statement was made last December that the total sums paid . to the United States Government on ac- . count of the British war debt, including the payment that month, exceeded t the total sums received in respect of 2 her allied war debts and reparation by . £140,000,000. If interest on past pay--7 meats and receipts were taken into ac- . count, the deficiency would be £200,000,000. Latterly, there has been a; i balance in favour of Britain; receipts ; in 1930 were £34,500,000, and payments J to the United States were £33,038,000. . There are 16 debt settlements on the ( . war account. ’The United States has f completed funding agreements _ with , Belgium, France, Great Britain, Greece, ' Italy Rumania and \ ugoslavia, Britain has agreements with France, Greece, Italv, Portugal, Rumania and Yugoslavia. France has agreements wi‘b Greece, Rumania and Yugoslavia. There arc also many settlements in respect of relief and reconstruction and other loans. Receipts and Outpayments. : In addition to the great volume of f transactions arising from inter-allied o finance and post-war loans, there is the i: series of international agreements de f termining the amounts of reparations 1 payable by Germany, Bulgaria, Hune gary and Czecho-Slovakia, and rcgulat--1 ing tho allocation of the proceeds. All recipients of reparation, with tho ex- - eeptious of Japan and the I nitcd States, arc debtors on the war account and are looking to German reparation ', payments to meet those obligations. .- Arising out of this situation is what is s known as the concurrent memorandum e accompanying the Young Plan, which s is an agreement between Germany and x-vonep Great Britain, Greece,

I Belgium. France, Great Britain, Greece, Italv, Portugal, Rumania and logo- I , slavia. under which the latter under- I take that Germany ‘‘will have the benefit of any relief which any one or < • more of these Powers may receive in : respect of its net outward payments on account of war debts.” This memor- i andum, which was signed nt the Hague . on January 20, 1930, sots out the amounts of the reparation annuities : payable by Germany which are required to meet out payments. For instance, in 1931-32, Germany is required . to pay in reparations, including the separate instalment to the United States, about £80.000,000; her creditors have to pass on £46,000,000 under their war debt settlements. There are other liabilities outside the scope ot tins memorandum and the balance of all payments is represented approximately by the figures quoted in Mr Hoover s statement. T The essential purpose of the Hague memorandum was t’ provide that in tho event of modification ot Aese “out payments,” Germany shall benefit to the extent of two-thirds of the net relief gained by her credlt ° r *’ ■ while tho latter shall retain This arrangement was to apply lor •’ years- in the remaining 22 years the . whole of the relief was to lie passed on to Germany. Germany’s Obligations. Germany’s annual liability under-the Yeung Plan rises from « 000 to £115,000,000 in the .“th. year. It includes £30,000,000 ot unconditional annuities (that is, payments excluded from any moratorium arrangements foreseen by the Young Plan . Of that amount about £25,000,000 is aj- . located to France, £27,000,000 to Britain £2,000,000 to Italv and the balance to Serbia, Portugal and Japan. • The agreements for the allocution ot ■ tho Young Plan annuities provide for the United Kingdom during a period ot 50 years precisely the annual amount required to make, up, with receipts from inter-allied debts, her war debt payments to tho United States and. an average sum of about £2,000,000 during a period of 37 years for the Test ot ' the British Empire. In addition, Bn- ' tain receives from France, Belgium and , Italy £1,400,000 a year for 37 years Now Zealand has only a small interi est in the question of inter-allied debts, , thought it is important to the Domin- ' ion. On tho one hand there is an ’ annual liability in respect of interest , and principal of £1,651,930 under the ‘ Imperial funded debt agreement; . on th"* other hand New Zealand receives ’ about £330,000 a year in reparations. Whether inter-imperial debts would bo included in Mr Hoover’s plan remains to be seen. What the Nations Owe. The following table shows the. amount of the war debts owing to the United States. The first column gives ’ various debts before funding, and the > second column shows the present value j of the debts:

Doll a rs. Before funding. Dollars Present Value Finland . . 9,190.000 7,413,000 Hungary 1 98-1,000 1.596,000 Poland . J 82,324,000 .1 46,825,000 Estonia • . 14,143,000 11,392,000 | ji | vi a 5,893,000 4,755,000 1,’ituania 6,216,000 4,9(57,000 ('/..-Slovakia 123.854 000 91.961,000 Rumania 46,945,000 35,172,000 (it. Britain 4,715..: 10,000 ; ,788,470,000 1 ’elgium 4 8:: j 26 <ioo 225.000,000 France . . 1.230,777.oft .'.196.500,000 66,161.000 2O,O30,000 IC.lv .. . 2.150,150,000 528 192,000 I'utals 1 1,036.376,000 .862,285,000