BEST FOR BOTH SIDES

Evening Post, Volume CXV, Issue 72, 27 March 1933, Page 7

BEST FOR BOTH SIDES

CASE FOR CANCELLATION

WARNING TO AMERICANS

(From "The Post's" Representative.) LONDON, January 26.

Mr. Neville Chamberlain, addressing the Leeds Chamber of Commerce, was the first British Minister to make public reference to the latest development of the war debts problem. -

"We believe, 5' Mr. Chamberlain said, "that the total cancellation of war debts and reparations would be the best thing that could happen to the world as a whole; but, if that is going further than American opinion is yet prepared to accept, we shall gladly discuss with our American, friends, whenever they are ready to receive our representatives, the lines on which an agreement can be reached, bearing in mind two things which seem to us essential: (1) That the settlement to be reached must be a final settlement; and (2) that it must be one which will.not involve the resumption of the claim on Germany for reparations, which it was tho object of the Lausanne settlement last year to end.

"For the Lausanne settlement is the one substantial advance during the. last few years in' the troubled history ,of Europe. Not only did it put an end to the uncertainty and anxiety which attended all the previous efforts to adjust an impossible situation, but it opened up new possibilities of a friendlier feeling between the European nations, on which might be based more fruitful co-operation in other spheres. "To disturb that settlement now would be to reopen, old ■wounds, and to destroy for an indefinite period all prospect of agreement on matters affecting the happiness and prosperity not merely of Europe but of the whole world. "I offer no criticism upon the American refusal to.prolong the Moratorium whilst conversations were taking place," continued the Chancellor of the Exchequer. "I realise the difficulties of the American Government; and, Temomboring how long it took to persuade European nations of the evil results of Eoparations, I can well understand how difficult is the aspect which the subject of war debts presents to the farmer of the Middle West from that which appears to us. WARNING OF PKECIPICE. "During the last ten'years, 1922-31, the United States received from foreign countries £400,000,000 in war debts; £1,000,000,000 in net interest on commercial loans; and £1,200,000,000 for the surplus of American goods sold abroad over foreign goods sold to her. That makes a total of £2,600,000,000 in icceipts. "How did the foreigners pay that vast sum? £1,500,000,000 came from expenditure by American tourists in European countries and remittances from immigrants living in America to their European relatives. Another £100,000,000 came by shipments of gold, making £1,600,000,000 altogether. "The remaining £1,000,000,000 came from loans made by America to the rest of the world, and it was that £1,000,000,000 of loans, and that alone, which made possible the payment of the £400,000,000 of war debts. "But, at the present time, American tourist expenditure has dwindled to a very low figure; so havo remittances from immigrants in America. She has already got more -gold than she knows what to do with, and she has stopped lending money. Therefore, if these war debt payments wore to be Tesumed, they could not be made by loans or by further shipments of gold.

"Effective means of payment would have to be found, and they could only be found by increasing sales of forr eign goods to America, or, what would come to the same thing, by diminishing purchases from America.

"Increased sales might be effected by a drastic reduction of the American tariff; or, in the case- of countries off the gold standard, by a depreciation, of their currencies in terms of gold. "Decreased purchases could bo ensured either by depreciating the currency or by increasing the tariff against America. "Now, in pointing out what 'would be the effect of resuming the war debt payments, I am not using threats. elf you see a man walking along a precipice, and you point out to him that the ground just in front of him is Undermined, that is not a threat; it is a warning, and it is not the less friendly because it is evident that, if -the man goes over the precipice, he is quite likely to drag you down with him.

"America depends to a large extent upon foreign markets to absorb her productions. She herself consumes only 82 per cent, of her own wheat; only 64 per cent, of her copper; only 60 per cent, of her tobacco; and only 45 per cent, of her cotton. For the rest she must find a market outside her own boundaries; and, unless she can find that market at a remunerative price, her producers are bound to suffer."