THE WAR DEBTS

Manawatu Standard, Volume LIII, Issue 16, 16 December 1932, Page 9

THE WAR DEBTS

PAYMENTS BY SIX NATIONS,

FIVE COUNTRIES DEFAULT.

GREECE TO PAY IN JANUARY

(United Press Association- —By Electric Telegraph.--Copyright.)

Received December 16, 11.25 a.m, WASHINGTON, Dec. 15

Tho United States to-day collected war debt payments from Britain, Italy, Caeclio-Slovakia, Finland, Latvia and Lithuania, while France, Belgium, Poland, Esthonia, and Hungary failed to pay. Greece, which failed to meet the 444,920 dollars payment on November 10 will, it is believed, pass up payment on January 1.

FIDUCIARY ISSUE.

SUGGESTION FOR INCREASE. (British Official Wireless.) Received December 16, 11.45 a.m. RUGBY, Dec. 15. The London Chamber of Commerce Ims written to Mr Ramsay MacDonald urging that the fiduciary issue be raised in order to offset the payment in gold to the United States. Mr Neville Chamberlain, dealing with suggestions on this line, explained during the debate in the House of Commons that the fiduciary. issue could only be utilised by the Treasury on representations from the Bank of England. No such representation had been made, and he considered it essential not to give the impression abroad that they were careless about the gold reserves or wanted to conceal anything that was taking place.

SUPPORT FOR GOVERNMENT.

WITHOUT DISTINCTION OF PARTY.

(British Official Wireless.) Received December IG, 11.45 a.m. RUGBY, Dec. 15. Commenting on tho debt payment, the Morning Post says: “In making the payment in gold, the British Government have behind them the nation, united without distinction of party. America has refused to make that contribution towards recovery without which, in our conviction, recovery can never begin.”

METHOD OF PAYMENT,

GOLD FROM BANK OF ENGLAND

(British Official Wrieless.) RUGBY, Dec. 14. Mr Neville Chamberlain, Chancellor of tho Exchequer, replying to the debate in the House of- Commons on the tho war debts question, explained that the gold to pay America would he taken from the Bank of England’s issue department, and paid for at the current price in Treasury bills. The bank would keep £19,500,000 ns the purchase value of its gold. The other £10,000,000 would go into the exchange equalisation account, where it would remain as an asset until required to buy gold again. It was true in one sense that if the fiduciary issue were not increased there would be a contraction of credit, but sufficient credit was available to make it unnecessary to create more unless unforeseen circumcf htu'Oq b He concluded by saying that tho friendly tone of the United States Notes was a good augury for tho success of the negotiations to be undertaken finally to settle tho long vexed problem.

VINDICATION OF TOLICY

LONDON, Dec. 15. Though the House of Commons were not permitted by a division to register their opinion on the debts question, the debate on the question was both impressive and exciting. The House was crowded. The American and all other foreign ambassadors were present. If a vote had been taken it would have been overwhelmingly in fayour of the Government as it was realised that British prestige was bound to gain as a result of to-morrow’s payment. The Daily Telegraph describes the debate as a plain and unanswerable vindication of Britain’s debt policy. The Times, in an editorial, says the debate showed that the Government’s decision to pay is interpreted also as the unanimous wish of the House of Commons which shared the Government’s opinion that anything savouring of unilateral repudiation would be a deplorable mistake. Sir Robert Horne’s speech should finally dispose of the mischievous fairy tale that Mr Baldwin riveted the burden of the American debt to Britain’s neck when lie went to Washington in 1923. Though Mr Lloyd George derided the Commons as “gibbering in a corner,” the debate proved that the “Mother of Parliaments” has no reason to fear comparison with either the French Chambor of Deputies or the United States Congress. WAITING FOR DEVELOPMENTS. "PARIS, Dec. 15. The French Government has telegraphed its Ambassador at "Washington informing him that the Ministry has been overthrown, therefore it is incapable of negotiating the December instalment. Le Temps, commenting, says: “It will bo several months before the consequences will be felt. We shall have to wait and see what form the throat of excluding the nations which have not paid from the negotiations on the war debts will take.”

FIELD OF HARD REALITY

CONFUSION INTENSIFIED,

WASHINGTON, Dec. 14. The war debt situation to-night moved out of the realm of tilings academic into the field of hard reality, but the confusion and uncertainty nevertheless seem somehow to have been intensified. The American peoplo and the American Government cannot bo said to be anything like satisfied with the outcome of the negotiations leading up to the December 15 payments. Four of the eleven countries due to make payments have announced defaults—France, Belgium, Hungary, and to-night Poland. Italy paid to-day while five pay to-morrow the 124,934,000 dollars due.

That any action will ho suggested by tho President against the defaulters' is dismissed as out of tho question. All talk of retaliatory measures is without foundation. It seems to be indicated that the impulse towards the clarification of the serious and obviously unhappy situation will come with Mr Hoover’s impending message to Congress relative to the entire question.

The usually •well-informed chief Washington correspondent of the New York Times telegraphs to-night: “The

message will review the state of world opinion relative to tlio debts on a factual basis and urge Congress to empower tlie executive statesmen of the United States in close co-operation with Britain to approacli a re-survey of the question for all the nations involved without regard to the acknowledged legal rights of the United States to collect war debts. The Parliaments of the defaulting nations reflect the popular foreign belief that there is no moral bond. This is just as pronounced as the belief in Congress to the contrary. “In the view of the Administration if the debt issue settled down to a tug-of-war among the Parliaments a host of international hostilities will bo engendered, meaning much hardship to the world. The ameliorating agency of statesmanship must not be disregarded. “By paying their debt instalments Italy, and particularly Britain are in a commanding position, and their plea for review and revision is now expected to carry extra weight.” The correspondent adds that Congress has been confident that all the nations would pay, “that they were bluffing and the entire attempt to obtain a revision was selfish propaganda. The French and Belgian action has brought about a more reflective mood on the part of many influential members. Some of them welcome the action of the defaulting nations as advancing tlio date of solution of the entire question by at least six months.” The correspondent concludes with a special examination of the British position, pointing out that the President feels that Britain was bound to maintain a united front with France as a result of tlio reparations agreement. “Now that the united front has been broken by the French default, the President is represented as feeling that the ideal time lias come for the United States and Britain to work out the world’s economic griefs in which debts play a strong part at least economically.”

SENTIMENT FOR REVISION.

COMMENTS BY AMERICAN PAPERS.

NEW YORK, Dec. 14

Nation-wide editorial comment reflects the feeling of uncertainty and divided opinion but also a continuance of the growth of the sentiment for revision.

The New York Times calls tho French default “mistaken but intelligible.” Tho Boston Herald says the need for revision is obvious, but does not justify “deliberate repudiation of a valid obligation.” Tho Chicago Tribune declares that France made a serious mistake. The Charleston (South Carolina) Courier says: “The British pay, knowing who in any final show-down are their friends. They will not throw away that friendship.” The Dallas (Texas) Nows says: “A conference for revision in accordance with ability to pay is a foregone conclusion.” The Des Moine Tribune says: “The French Parliament has as great a right to bo mulish and unreasonable as the American Congress.” The Lincoln (Nebraska) Journal says: “The Soviet is no more nonconformist than Conservative France.” The San Francisco Chronicle says: “The French Chamber does what the American Congress does.” I'll© Los Angeles Times says: "Default cannot fail to cost France dearly.” Tho New York Herald-Tribune’s Washington correspondent telegraphs: “Some of tho most irreconcilable antieancellationists in Congress were urging the President to appoint on his own executive responsibility a bi-par-tisan commission to meet separately with representatives of the foreign debtors in good standing and consider their mutual problems. While it is not certain that Mr Hoover will adopt this particular plan, which has been developed in sufficient detail to envisage a commisison of three Democrats and three Republicans, only two of whom would be Cabinet officials, it was clear that ho would begin paving the way for averting a crisis on December loth, when tho next instalments were due. Negotiations in any event would be limited to the nations which keep their debt contracts in tho meantime.”

SENATOR’S SUGGESTION

Received December 16. 10.25 a.m WASHINGTON, Dec. 15

A fee of 5000 dollars for passport visas to American citizens desiring to travel to a country in default on the war debt payments is proposed in a resolution to be submitted in the Senate by Senator McKeller.

CABINET MINUTES.

NOT TO BE PUBLISHED,

Received December 16, 10.5 a.m. LONDON, Dec. 15. In the House of Commons Mr Baldwin, replying to Mr Lloyd George’s request during the war debts debate for the publication of the 1922 Cabinet minutes, said that Mir Ramsay MacDonald was not prepared to advise His Majesty to assent thereto.

AUSTRALIAN MINISTER’S OPINION. IMPORTANCE OF PAYMENTS EXAGGERATED. Received December IG, 12.20 p.m. LONDON, Dec. 15. Condemning “the turmoil about one instalment of the war debts,” Mr S. M. Bruco, the Australian Resident Minister, told the Glasgow Chamber of Commerce that the importance of this particular payment was tremendously exaggerated. “We will be much better employed dealing with the world position. 1 do not think it would have mattered if the instalment had. not been r>aid. The fact that it has been unpaid for 15 months has not hindered, but has helped the world. I do not think the payment is going to rock the world, although it has brought into clear perspective the position of the debtor countries in the face of the calamitous fall in wholesale prices.” OFFER OF LOAN. ANGLO-FRENCH FRIENDSHIP STRENGTHENED. Received December 16, 8.40 a.m. LONDON, Dec. 15. The Financial News’s Paris correspondent states that, despite denials, it is a fact that Franco offered to lend Britain £20,000,000 to facilitate payment to America. Although she rejected the offer, it has strengthened the Anglo-French friendship.

COMMERCIAL LOANS,

AMOUNTS ADVANCED BY BRITAIN.

(British Official Wireless.)

Received December 16, 11.45 a.m. RUGBY, Dec. 15. Answering a question in the House of Commons, Mr Neville Chamberlain said that the amounts now owed on account of loans mado by Britain since 1918 were: Belgian reconstruction loan

£9,000,000; other Belgian loans, £3,600,000; and relief loans as follow: £

Austria 8,825,000 Poland 4,000,000 Roumania 2,101,000 J'ugo-Slavia 1,955,000 Estlionia 218,000

All these loans were made for productive purposes and were therefore analagous to commercial loans and not to war debts. Payments were suspended under the terms of the Hoover moratorium, and a further suspension after the end of the Hoover year lrad been conceded in view of the financial difficulties at present confronting these countries.

FOREIGN EXCHANGES. NEW YORK, Dec. 14. The effect of the overnight news on the foreign exchange was interesting. Whereas sterling rose to 329 J as against this week’s previous high level of 32S£, 3211 a week ago, and 3143 at the lowest level on November 29th, the franc yesterday declined to 3.90 compared with 3.92 g when the debt Notes were first .presented almost exactly a month ago. The present rate appears to be tlio lowest since the franc was legally stabilised in 1928, and undoubtedly touches the gold-exporting point, at Paris.