DOMINION’S OFFER

Manawatu Standard, Volume LIII, Issue 19, 19 December 1932, Page 6

DOMINION’S OFFER

WAR DEBT PAYMENTS. WILLING TO REASSUME LIABILITY. WELLINGTON, Dec. 18. The New Zealand Government haa offered the British Government to reassume liability for payments under the funded war debt, if the concession to the Dominion was granted on the assumption by Great Britain of a continued moratorium on war debts by the United States. A cable to this effect has" been dispatched to the Secretary of State for the Dominions, Mr J. H. Thomas, by His Excellency the Governor-General, Lord Bledisloe. Tho cable is as follows: “His Majesty s Government in New Zealand desires to recall the fact that His Majesty’s Goy. eminent in the United. Kingdom lately agreed to extend the operations of the Hoover Moratorium with a view to financial relief to this Dominion, and the New Zealand Government gladly'accepted this generous concession. His Majesty’s Government in New Zealand are not aware how far His Majesty’s Government in the United Kingdom granted this concession in reliance on an anticipated similar concession by the United States of America to the United Kingdom, and they would be grateful to be informed whether the British Government would in circumstances as they now exist desire to review the position and restore the status quo ante so that this Dominion should reassume liability for payment as if the moratorium had nob been extended. If the concession to this Dominion was granted on the assumption of a continued moratorium by the United States of America, then His Majesty’s Government in New Zealand would feel in honour bound to reassume liability.” EXPIRl r OF MORATORIUM.

In announcing the Government s decision last evening, lit. Hon. J. G. Coates said, that tollowing on the expiration of the Hoover Moratorium the Prime Minister, Rt. Hon. G. W. Forbes, and his colleagues bad given consideration to the position as it affected the obligations of this Dominion to the United Kingdom. “It will be remembered,” said Mr Coates, “that when the Hoover _ Moratorium came into effect His Majesty’s Government in the United Kingdom -of their own volition offered to extend the moratorium to the war debt of New Zealand to the United Kingdom—an offer which was gratefully accepted, especially as it gave a welcome and muchneeded relief to the finances of tho Dominion.

The Hoover Moratorium is now at an end, and last week His Majesty’s Government in the United Kingdom were obliged to make a heavy payment to the United States of America on account of their funded war debt. His Majesty’s Government in the United Kingdom had previously signified their willingness to continue the moratorium with respect to the obligations of this Dominion to the United Kingdom, but His Majesty’s Government in New Zealand now consider that they should not accept without question this most generous offer. DIFFICULTIES IN BRITAIN.

“They are convinced that the people of New Zealand .would not wish to strain the generosity always so freely extended by the people ot the United Kingdom, who are facing difficulties perhaps even greater than those confronting this Dominion. Thev have accordingly felt it advisable to inform. His Majesty’s Government in the Unit, ed Kingdom that if the United Kingdom’s offer to continue the postponement of payments due by New Zealand was made on the assumption that their own payments due to the United States could also be postponed, then New Zealand would feel bound to reassume liability.” In conclusion Mr Coates said it was felt that the action of the Government would meet with the approval of the people of this Dominion, notwithstanding the difficulties confronting them.

AMOUNT OF DEBT. At March 31, 1932, £27,532,164 of Now Zealand’s public debt was owing to the British Government, ail out £1,191,919 of this being on account of war expenditure. Arrangements were made with the Imperial Government in 1922 for the funding of this debt. The funding was carried out on an annuity basis of 6 per cent., the -total payment each year being £1,651,930. Interest is at the rate of £4 19s 5.88 d per cent., the balance of the 6 per cent, going to reduction of the debt. The first half-yearly payment of £825,965 was made to the British Government on December 1, 1922. The division between interest and principal in the payments made during each year has been as follows:

‘Half-year only, tlncluding £200,000 additional, paid off Naval Defence loan. Under the agreement the original amount of £27,532,164 will be automatically discharged from the public debt by the end of the financial year 195859, but this date is subject to variation in accordance with the offer of postponement made by the Imperial Government. The amount payable for amortisation will gradually increase each year as the inter-payment reduces on the lessening debt. ' For 1931-32, £447,567 of the amount payable will be in reduction of the debt as compared with £292,964 in 1923-24, interest payable annually having already been reduced by over £160,000. An important condition of the agreement with the British Government is that the whole or any part of the funded debt mav be redeemed at any time. This condition was taken advantage of when on December 1, 1924, £200,000 was paid off the naval defence loan. In his Budget delivered on October 4 the Prime Minister announced that; ‘‘Great Britain has again extended a helping hand by consenting to postpone for another year all payments due ori our funded war debt, and certain other debts* due to the British Government. The additional relief to this year’s Budget is £825,000. in addition to which a saving of £47,000 will accrue to the State Advances Office. Our grateful thanks are due to the Mother Country for this substantial measure of assistance during the acute period of our troubles.” New Zealand under the Hoover moratorium has already been excused two half-yearly payments of £825,W0 each, duo on December 1, 1931 and Jl, no 1. 1932. The further saving to which the Prime Minister refers is in respect to the payment due on December 1, and presumably Britain’s offer of suspension for “a further vear” also eo'‘ered the instalment due on June 1. IJBL, In effect, therefore No.w Zealand is offering to reassume liabilty to pay £1,650,000 although granted a postponement by Britain.

Year. Balance of ended debt outMarch 31. Interest. Principal. standing. *1923 . 684,794 141.171 27,390.993 1924 . 1,358,966 292,96'' 27,098,029 1925 . 1.344,212 507.718f 26.5S0.311 1926 . 1,318,641 333,289 26,257.022 1927 . 1,301.856 350,074 25.906.948 1928 . 1.284,224 367,706 25.539,242 1929 . 1.265,706 336 224 25.153,013 1930 . 1.246,254 405.676 ■24,747,342 1931 . 1.225.822 42b', 108 24.321.234