INTERNATIONAL FINANCE

Dominion, Volume 13, Issue 207, 27 May 1920, Page 5

INTERNATIONAL FINANCE

- —«-^ —& FOEEIGN GOVERNMENTS AND THEIR-CREDITORS. A year ago it might have been expected that the report for 1919 of the Council of Foreign Bondholders would be chiefly concerned with tho finances of tho States recently belligerent; but Rus-. sia and Turkey are still in the meltingpot, the financial position of Greece, now verv favourable, depends largely on tho terms of tho Turkish Treaty of Peace, and the outlook for most of tho other ex-combatant States is extremely uncertain—notably so for Austria, Hungary, and Portugal, says the London "Economist" of April a. Of Russia nothing can bo stated except that the external debt is nearly .£925,000,000, or, without the Land Banks' bonds, about .£100,000,000 less, with some ..£BOO .or ,£BSO millions in addition duo to the Allied Governments for advances during the war. Tho liabilities of Austria have been multiplied nearly sevenfold, of Hungary more than fivefold, of Turkey more than threefold; but probably the external war debts of all four countries will go the way of the Confederate Loan of 1863, which still stands in. the Report; among tho instances of default in America. On the Turkish Unified Debt, however, the arrears of interest outstanding are ,£G,320,f100 sterling, against which there are deposits.in Constantinople and in various European capitals amounting in Turkish currency to ,£9,853,072, but this sum is far bolow tho actual amount of the arrears, owing to the adverse rate of exchange. In Spanish America tho gen-, oral outlook is more encouraging. Honduras, indeed, is more hopelessly jn default than ever, owing to fresh revolutionary disturbances, and Ecuador, though there has been a slight improvement since the Report went to press, has not returned to the path towards solvency, in spite of a. severe warning from tho representatives of American banking; interests, delivered through the. Pan. American Conference, and; virtually endorsed by a committee of.that body. ■Perhaps the coming visit of tho Presi-dent-elect to Europe may accelerato the improvement. In Argentina the Pro. vinces of Buenos Aires' and Co'rrientes aro still in default, with no apparent excuse; the city of Rosario has defaulted likewise. In Brazil the State of Bahia is paying the interest on its external debt in Treasury bills instead of in cash; the city of Manaos is totally in default, and the cities of Bnhia and Para are partially-so. On the other hand, Paraguay has paid the overduo interest on its external debt, with .545,000 over for the sinking fund. Costa Rica is meeting its engagements, but its Gov'eminent has not obtained recognition nt, Washington,•though it has got rid of President Tiribco. Colombia- is in 6ight 'of great prosperity; Venezuela has-reach-'efl it; both countries are punctual in their debt service. Nicaragua is payings off arrears; Guatemala still delays to aiv range to do so. Salvador has failed to keep up 1 its payments of arrears of the. railway subsidy, but has been able. to nieet the interest on its funding bones; the value of the.dollar has risen in two, years by about 73 .per cent,; the coming coffee crop will beat all records, and tho great eruption' of 1917 has renewed the soil of the plantations.. In Uruguay, as in Salvador, tlie peoplo are more prosperous than the Government, but the Budget deficits have been courageously met T>y fresh taxation. Mexico, in spite of the declarations of President Carranza aud his representative in Europe, and notwithstanding the rise in silver and a certain increase of .prosperity, is not likely to be able to arrange with h«r creditors until her Government can keep order and obtain recognition from Great Britain and the ..United States. The most persistent defaulters are still, to be found among the Southern States of that Power; but West Virginia has,at length decided to submit to the decision of tho Supreme Court of the United States and ■.15SU1HO one-third of the pro-secession debt: of Virginia, with interest nt 5 per .cent Missifsippi, Louisiana, and the rest ofthe/defaulters are still impenitent, and are hot likely to lie mnde conscious ot their miedoeds through attempting to, borrow in Europe,