NOTES AND COMMENTS

Dominion, Volume 35, Issue 280, 25 August 1942, Page 4

NOTES AND COMMENTS

Callous provocation in the form of U-boat sinkings of merchant vessels has brought Brazil into the war against Germany and Italy. This is the second occasion on which the Axis Powers have added to the ranks of their enemies in such a fashion, for Mexico’s declaration of hostility was ■brought about largely as a result of the toll taken by unrestricted submarine campaigning. Potentially, Brazil is a formidable belligerent. Hei fleet and air force are relatively small, a fact which no doubt inspired the comment in Washington that she is “at present incapable of waging offensive war.” On the other hand she is a progressive republic of 44,000.000 people, and very considerable resources capable of great development. The most important immediate aspect of.her decision, however, concerns the facilities the Brazilian Government will be in a position to provide. Several excellent Atlantic bases will be available to British aud United States ships, and closed to enemy craft. Nearly a score of naval craft suitable for antisubmarine patrol work will be added to the mixed guardian fleet non operating along the Atlantic coastline of the Americas. In addition to this, firm action by the Brazilians-will place a check on the activities of enemy agents and trouble-makers who flourish in Latin-American territories. Finally, the active co-operation of Brazil may be expected to be increasingly advantageous in the vital fields of supply. This most extensive of South American countries is one of the world’s natural sources of rubber, and the wide development of plantations would represent a Brazilian war industry of enormous value.

There is an interesting reference, in the annual report of the AuditorGeneral, to operations under the Memorandum of Security. In tlie Budget of 1940 the Minister of Finance explained that arrangements had been made “for the cost of New Zealand’s forces overseas to be financed by the United Kingdom Government on a loan basis.” The Dominion would be charged interest at the rate payable by the British authorities on war loans. In 1940-41 nearly £6,000,000 was obtained in this way, but repayments brought the sum owing at the end of the year down to £4,5L>,000. Last year the borrowings under the memorandum amounted to £8,243.000. The repayments, however, included the balance owing on the previous year, plus £5,425,000 on current account so that the debit balance on March 31 last was only £2,818,035. Unfortunately the figures, interesting as they are, do not disclose the exact position. Last year the Minister of Finance stated that war expenditure that came to charge was less than half the amount estimated, and he added that tills was largely due to the delay experienced in -the receipt of overseas claims. The estimated expenditure under the memorandum last year was £31,000,000, and tlie sums actually borrowed totalled only £8,243,000. Was that due to the outgoings being substantially below the estimate or were there, as at Mai eh 31. extensive commitments that had not come to charge? If the balance outstanding on that date (£2,818,000) could be taken to represent our total temporary indebtedness to tlie United Kingdom Government uiidei this arrangement then the position would be very satisfactory indeed, for it would indicate that the Dominion had not leaned heavily on the Mother Country for financial assistance. A great deal, however, obviously depends upon the aggregate of any items that had not, at the close of the year, come to charge.