The Waikato Times With which Is Incorporated The Waikato Argus. FRIDAY, DECEMBER 2, 1932. WAR DEBTS.

Waikato Times, Volume 112, Issue 18808, 2 December 1932, Page 6

The Waikato Times With which Is Incorporated The Waikato Argus. FRIDAY, DECEMBER 2, 1932. WAR DEBTS.

The discussion and correspondence respecting the war debts due to tho United States continue, not with any hope of changing the decision for the payment due on December 15, but in the hope that the American public will learn something about the issues involved. At present they excite some interest. If the discussion were revived in three months it would be regarded as a closed issue and no one in America would read it. The letter sent by Mr Ramsay MacDonald put the position very clearly. He shows that Britain remitted the debts due by her Allies in the war, reserving only enough to meet her liabilities to the United States. Britain did this in the interests of world trade and she now asks the United States to take the same action. There are not wanting voices in America to urge the country* to take the same view, ami to point out that the collection, of war debts must hamper the export of wheat, cotton and tobacco.

War debts stand on a different footing from ordinary International loans, in that they were incurred for objects which yield no return to the borrower. This is understood by financial authorities of every kind, but it is not understood by the people. If we would understand their action we must realise that they did not consider the war as one in which they were interested, but merely one in which they were called in to rectify the muddle into which Europe had allowed her affairs to drift. The authorities knew better, and had they not seen the possibility of danger to their own country they would not have oome into action. The United States still acts •m Washington’s advice to avoid European entanglements., forgetting that in 130 years conditions have changed. It is impossible for a country such as the United States to live to itself, and there is no indication of America forming an economic or political bloc and rivalling Europe. It is, however, the feeling of being remote from Europe that makes them deaf to any arguments about Hie injury they do the world by the attitude they take. The depression In trade is as acute as ever. The revenue, which showed an immense deficit last year, is still down, and further taxation Is threatened. Americans think of any reduction of war debts as generosity, and they do not feel inclined to be generous. • Meantime the effect of their aotion is shown in the exchange, which has fallen to the lowest figure ever known, and Americans who watch statistics closely will realise what this means for their export trade. It is reported that there is soma proposal to pay the Interest on the debt and withhold the reduction of I ho capital. We trust it will not he necessary to take this linn. However serious it. may lie for the time being i.o pay such large sums to the United gtat.es, .swollen by the fall in the value of Hu 1 pound, there is likely to ho large compensation in I lie absence of competition in international trade and the retention hv London of the money which comes from being the llnaneiai centre of the world. The best suggestion made hitherto

is that the payment should be made in gold. The high price which gold now fetches is increasing the output in all directions. The Rand is turning out more gold than ever. The hoards of India are lliuling their way to the market. The stir which is evident here in all districts where gold was ever found is repeated in every country in the world. The increase in gold stocks Is likely to be considerable, but as they will all find their way to bank vaults in the United States they will do nothing to improve trade. The Daily Express, Lord Beaverbrook’s paper, calls out for a reduction in the purchase of goods from America. The paper gives a list of goods purchased, all of which could be had elsewhere, and it points out that ill 1931 America sold goods valued at £104,000,000 lo Britain and only purchased £17,000,000 in return. It is perhaps as well that the paper should point out these things, hut there is no necessity. The fall in the exchange will add so greatly to the price that there will be an immediate search for cheaper sources of supply, and these will be found In countries where the currency is on a sterling basis. It is possible that New Zealand might find its profit in the trade the United States is driving away. Meat products and animal oils and fats we should he able to produce. In the correspondence conducted between Britain and America we bear nothing of protests from trance or Italy. The amounts they owe to Britain are larger than those owing to the United States, on which very large concessions have been made. Britain reduced her demands to amounts sufficient to cover payments to America. At the Lausanne Conference the German reparations were remitted, with an Indeterminate condition that the decision depended on America remitting debts. It will he found that Mr MacDonald .extorted France's consent to this by promising to remit the debt which France owed to Britain. It cannot be said that British statesmen of either party have shown much acumen. They have made enormous concessions for which little credit has been gained or few advantages obtained, .and events point more decidedly than ever to Britain being left with her liability to America as the only country paying anything towards Us war debts.