The Wanganui Chronicle TUESDAY, JUNE 5, 1934. THE WAR DEBTS

Wanganui Chronicle, Volume 77, Issue 131, 5 June 1934, Page 4

The Wanganui Chronicle TUESDAY, JUNE 5, 1934. THE WAR DEBTS

PRESIDENT ROOSEVELT’S message to Congress concerning the wai- debts problem does not, on its face, indicate that any advance is likely to be made towards a satisfactory solution. The assertion that “The American people are not disposed to place an impossible burden on their debtors, but are nevertheless in a just position to ask that substantial sacrifices be made to meet the debts,” amounts almost to a contradiction in terms in a practical sense. The nations of the world are in no satisfactory situation to meet obligations which are now 40 per cent, more onerous than they were when they were contracted; America is unwilling to accept repayment for the goods and services which she rendered during the war period—the goods and services of the debtors, and thus the latter, are called upon to scramble amongst themselves for the surplus gold that comes into the world in order to have the privilege of discharging but an unfair portion of the debts under the most unfavourable and disheartening of circumstances. The world is suffering from a breakdown of the price structure, and it is idle to deny that it is tills very burden of debt transference from Europe to the United States of America that was a major cause of the present unsatisfactory position. President Roosevelt also says that “The repayment of debts has gravely complicated our (American) trade and financial relationships with the borrowing nations for many years.” This is true, but the solution is surely within t he power of the United States to take the initiative in the matter. War debts and recovery are interlocked, and there is no gafhsaying that proposition. The United States admitted its truth when it initiated the Hoover Moratorium. But the United States of America seems incapable of coming into the family of the nations in a wholehearted manner. That there are difficulties in the way there is no doubt, for with a large body of industrial workers employed, the lowering of the tariff is a matter of great difficulty, while the agricultural communities feel that their market has been lost to them through the nationalistic economies of those countries which formerly purchased the wheat and cotton which America exported. It is doubtless to placate these two sections of American public opinion that the President makes the following observations. The American people were certain to be swayed, he says, “by the use which debtor countries make of their available resources, whether they be applied for the purpose of recovery as well as for reasonable payment of the debt owed to the United States, or for the purpose of unproductive nationalistic expenditure or like purposes.” Tho. foregoing can be interpreted as meaning that America will look with unkindly eyes upon those countries which seek to become less dependent upon the United States for any supplies, by reorganising their internal economy. It can also be ininterpreted as meaning that America will frown on rearmaments. America, however, is in no case to lay stress on either contention, for the nationalistic policies of the European countries have been induced by the same policy which America has herself pursued, and any reference to disarmament or to rearmament would come ill from America at a time when a modem Armada is in the Hudson River for the President’s inspection—a colossal navy built with no other excuse than that of prestige. Again, despite the twice-made assertion of the President that those countries which have made token payments in respect of the war debts would not be treated as defaulters, the American Congress has passed, almost by unanimity, Senator Hiram Johnson’s Bill to outlaw from the capital markets of the United States the bonds, securities, and obligations of any foreign Government “in default in the payments of its obligations or any part thereof,” and that this ban applies to Great Britain despite her token payments. No attempt was made during the debate on this measure to examine the case for cancellation or reduction of war debts, and certainly no attempt was made to refuse the ease which supports cancellation. It does not appear then, that America, despite the Presidential assertions, is prepared to listen to the case for cancellation, any more than it is prepared to listen to the reverse case of the Repudiation States repaying their just debts contracted before the Civil War. America’s policies tariff, monetary and debt, are all designed to make the re-establishment of an international economy, which shall work smoothly, infinitely more difficult of achievement, and in view of this it would appear to be a waste of time endeavouring' to load hop to tho light i n regard to the war debts.