BRITAIN’S REPLY.

Waikato Times, Volume 112, Issue 18804, 28 November 1932, Page 7

BRITAIN’S REPLY.

AN IMPRESSIVE DOCUMENT

OPINION IN CITY CIRCLES.

MAY BE FORCED TO DEFAULT,

United Press Assn.—Elec. Tp!. Copyright (Received Nov. 28, 8.50 a.m.) LONDON, Nov. 27. Mr. Ramsay MacDonald, the Prime Minister, and the other Ministers were busy to-day preparing the draft reply to the United States. This will be ready for a Cabinet meeting on Monday. It, is believed the reply will be an impressive document practically a manifesto, which it is hoped will result in a modification of America’s attitude. It is understood the Government recognises clearly that the present issue is not the debt itself, but the question of the December payment. It holds strongly that the payment would prove disastrous to the payer and receiver alike. The best city opinion stresses the fact that the moratorium is only a subsidiary Issue, and unless It Is followed by drastlo debt re-, vision, Britain will probably be compelled to default In 1933, and Qermany may face the Issue by declaring a complete moratorium.

PAY* IN GOLD. OPINION IN LONDON. TEACH AMERICA A LESSON. United Press Assn.—Elec. Tel. Copyright. (Received Nov. 2S, 12.30 p.m.) LONDON. Nov. 27. The Daily Telegraph’s financial editor says the city feels that failing an amicable settlement payment should be made on 'December 15 under a vigorous, protest, with the clear reservation that neither Britain nor the world’s monetary system would permit of further transfers under the old scale. Already perhaps the weakness of sterling is beginning to .teach America the lesson that the war debts block the way to stability, and the payment in gold might carry the lesson a stage further. There is growing support in responsible banking circles of Sir Robert Horne’s advocacy of this method.

In a speech last week Sir Robert Horne, a former Chancellor of the Exchequer, said: “I have no doubt whatever that we ought to pay. For Britain to default after her extraordinary recovery in the past year, and the prestige she has resumed in the economy world, would he a disaster, not only for us but the whole credit structure of the globe. How should we pay?—l have no doubt whatever, that we should pay by shipping bar gold. There is- at present £140.000,000 of gold in the Bank of England. We have liyed long enough off the gold standard to know we need not be frightened at the absence of some of this gold.”