The Waikato Times With which is Incorporated The Waikato Argus. THURSDAY, SEPTEMBER 18, 1924. INTERNATIONAL DEBTS.

Waikato Times, Volume 98, Issue 16094, 18 September 1924, Page 4

The Waikato Times With which is Incorporated The Waikato Argus. THURSDAY, SEPTEMBER 18, 1924. INTERNATIONAL DEBTS.

The United States are still living In hopes of collecting the money which they advanced to other countries for the purpose of carrying on war. The latest plan is one prepared by Mr Edward Hurley, a member of the American Debt Funding Commission, for payment by Prance of some £20,000,000 each half-year for 67 payments, at a rate of interest to be fixed by the negotiators. There are two new features in the proposal, one being that there shall be a moratorium of five years, during which no interest shall be charged, and the other that half the amount of the payments made during the first 25 years shall be invested in private French industries. The effect of the second proposal would be to give Americans a very large share in French industrial undertakings. At the end of the period America would have £500,000,000 invested in French industries, and would very naturally desire to have a controlling voice where they owned the greater part of the capital. It would also be quite natural that Frenchmen should object to the ownership of big businesses passing from their own countrymen to foreigners. The plan, we are assured,, is approved in America, and this we are quite prepared to believe. We should be surprised, however, to learn that it was approved in France or even that any Government had submitted it to the Chamber of Deputies. In America it is believed that the plan will do for France what the Dawes plan will do for Germany, and that it will stabilise the franc against the chances of speculation. Financial experts are not usually great politicians, but this plan seems equally weak on both sides. In the first place, although French finances are far from strong, the value of the currency has not disappeared. Then again, the benefits which the Dawes plan are to confer on Germany have yet to be seen. The rate of interest mentioned for the £40,000,000 loan is 8 per cent, and there is no great benefit to bo obtained from money borrowed at this rate. The exchange value of a currency depends upon the proportion of exports and imports. If they balance the currency will stand at par. If the debts of France to America are increased to an amount of £40,000,000 per annum the exchange will turn against France. The reason why sterling has not gone back to ; par with the dollar is because England has more to pay America than America has to pay England. When, therefore, we are told what a good thing it will be for France to pay £40,000,000 per annum to America, we may be permitted to feel sceptical. The proposals of the American board are in keeping with all we are told of American big business. Industrial enterprises of some kind or other, are the form which is taken by American energy and ambition. To make money is evidence of success, and' is therefore aimed at, but to exercise control, dictate the policy and enjoy power is the motive which frequently appeals. This is why business in America so often tends to combines, trusts and similar monopolies, which inevitably cause resentment. At present there is a general protest against these methods. The business leaders and the financial chiefs perceive it and are nervous in consequence. The recent setback in trade in the United States is largely due to this uneasiness. In spite of it the men who perceive the resentment which their methods have created in their own country would carry those .methods into foreign countries. They look forward to controlling many French industries; in Germany they hope, by establishing a gold standard, to obtain a footing on advantageous terms, as no other country has gold. It is the dread of this that prompted the suggestion of the chairman of the London and Westminster Bank to raise the rate of interest and lint sterling on an equality witli the i dollar. This desire to control and manage others leads inevitably to resistance. The financier of the United States is pursuing the same aim as lln' Kaisers of Germany and Austria. Tnc , n ,.t.!iods differ, but in each case 1 the world was to pay 101 l to those I who had the power to enforce it. If : \merican statesmen were wise they ! would let. the question of international debts sleep. They are getting : rid,ooo,ooo pcr*annum from Britain. ! and ' d 0 not find themselves any better ! off. although Britain is certainly worse off. Payments from other countries 'if ihcy could obtain them would do them little or no good financially, but 'would create strained relations bcJ tween themselves and every European

country. America is sorely in need of statesmen. For want of them she has had to take business men of limited vision and an absence of international outlook. She has taken action towards Japan which has turned that country towards Russia. The United States did much trade in the Far East, and looked forward to doing more, but she is likely to . find it diminished. To live and let live is a good working system, and is as applicable to national concerns as to individual affairs. The American has not grasped this idea. His notion of trade is to sell everything and buy nothing, and his aim is to obtain the control of industry. The circumstances of the war placed an immense opportunity in his hands, and he is disposed to make the utmost of it. In the case of the French he is likely to meet with little success. The exchange value of the franc has been slowly falling, and to-day we are told that the Bank of France is charging seven and eight per cent, interest on advances. It will be hard to convince them that they will be better off if they pay America £40,000,000 per annum. International debts are a greater curse than reparations, for in addition to the damage they inflict on trade they create bad feeling between nations and pave the way for another great war to be fought under the banner of a bum bailiff.