PAYING WAR DEBTS.

Waikato Times, Volume 100, Issue 16711, 29 January 1926, Page 5

PAYING WAR DEBTS.

BRITAIN AND ALLIES

SETTLEMENT WITH ITALY. PRESS COMMENT. The debt funding agreement between Britain and Italy has been signed. It is announced that the payments will be separate from reparations. The agreement has had a mixed reception from the British Press, the feeling being that In view of Britain's payments to America, she should Insist upon better terms from the other Allies.

(Australian and N.Z. Cable Assn.) LONDON,,January 27. The debt funding agreement between Italy and Britain has been signed. It is officially stated that Italy will pay £2,000,000 immediately, £4,000,000 a year for the next two years, £4,500,000 in each of the following years until 1987, and £2,250,000 in 1988

The payments are to be made halfyearly.

The Chancellor of the Exchequer, Mr Winston Churchill, has published a Note explaining that the Italian payments will be separate from reparations. The agreement includes a clause to the effect that if Britain receives more from reparations and Allied debts than Britain has already paid 'the United States, Italy's proportionate share of those payments would be credited to future debt payments. Mr Churchill asserts that the settlement is more favourable than the ItaloAmerican one. He describes the agreement as another milestone on the road to European appeasement and consolidation.

(Received January 29, 9.5 a.m.)

LONDON, Jan. 28. The newspapers emphasise the sacrifice made by Britain under the Italian debt settlement. It is understood that France will be next. M. Doumer intends to come to London as soon as the financial debate in the Chamber of Deputies is ended. The Dally Telegraph's . diplomatic correspondent says the justification for the terms made with Italy lies in the fact that Italy reaeives so small a quota from the German reparations, also Italy's frequent hearty support of Britain's European policy. The Daily Chronicle describes the settlement as fleecing John Bull. The Morning Post says it marks another step in the unification of Europe. It is too lale now lo repine that the policy of general debt cancellation was not carried into effect, though it must always be a matter for regret. The Times says that since cancellation was not possible the British policy had been lo cancel all except an amount equal to the sum paid to America. "In practice, however, we cannot obtain more than the debtors arc able lo remit without strain, otherwise what we might gain in repayment we should lose in trade owing to the diversion of moneys from current purchases to the redemption of old purchases." The financial Times says Mr Winston Churchill wanted some relief from the burden of payments to America, and accepted the first reasonable figure suggested.

The Treasury is taking the view that, a bird in the hand is worth two in the bush.

The Daily Herald declares: "Once more British Ministers have been taken in by a foreign sob story. The interests of a heavily-taxed people have been sacrificed for visionary political advantage."

LATER.

BRITAIN'S POOR BARGAIN.

£8,000,000 A YEAR TO THE BAD

(Australian and N.Z. Cable Assn.) (Received January 29, 10. SO a.m.) LONDON, January 28.

The Daily Express explains that under the settlement Italy in sixty-two annuities pays Britain £512,250,000 in capital and interest in respect of a debt or £590,000,000. This is equivalent to Britain foregoing £78,000,000, together with all interest on the remainder.; The British Treasury has estimated that Italy is capable of paying £8,000,000 to £9,000,000 yearly. Italy's gross debt at 5 per cent, represents 7d in the £ of Britain's income tax. Under the settlement Italy will reduce this burden by Id in the £ in 1926 and id in the £ at the period of highest payment. "In other words, the British taxpayer will continue to pay 6d in consequence of the debt, and the Italian taxpayer Id. Meantime Italy has undertaken to pay United Stales £481,000000 in respect of a debt-of £420,000,000. Britain is paying America £35,000,000 yearly. If we receive £4,000,000 from Italy, £12,500*000 from France, and £10,000,000 under the Dawes scheme we are still £8,000,000 i annually to the bad."

GREAT CORDIALITY.

MINISTER GIVEN GREAT LATITUDE

Received January 29, 1-30 p.m. LONDON, January 28

An atmosphere of great cordiality marked the conclusion of the Italian debt negotiations. The total debt to Britain was £611,000,000, against which Count Volani claimed a. refund of £22,000,000 for gold dbcpositcd in London'during the war. Mr Churchill, at the ceremony of signing the agreement, .declared that Cabinet had allowed him wide latitude in order to give consideration to the Anglo-Italian friendship. It is noteworthy that the agreement is in no wise mixed up with reparations. A clause in the agreement protects Italian .currency in the event of abnormal depreciation due to the payment of debts abroad, while in the event of Britain receiving more from reparations and Allied debts than she has paid to America, Italy's share of such surplus will be credited against future payments. Mr Churchill, in an interview, however, said Britain up to the present had paid £100,000,000, and received £25,000,000 from reparations, while so far, nothing had come from war debts.