COST OF THE WAR.

Hokitika Guardian, 3 August 1922, Page 2

COST OF THE WAR.

austkai.ian and n.z. cable association,

ALLIED DEBTS TO BRITAIN. LONDON, August 1. Sir Arthur Balfour to-day circularised French, Italian and Belgian ambassadors and forwarded a courtesy copy to the American Ambassador, regarding the 11”9 millions which the Allies owe Britain, apart from 655 millions due . from Russia. The text of the document which Cabinet approved, will be published to-morrow. It is understood it says Britain would be willing, ifsuch action were possible, to forego all her claims arising from war debts, reparations and indemnities as the Bntish Government is of opmton tha this is the only method likely to restore the stability of Europe, but Britain s economic position makes it impossible to | cancel debts or reparations since she i is obliged to repay war debts to Uni- ! ted States. Britain asks Her Allied deb- ' tors to come forward with a definite scheme for meeting their obligations. Britain is willing they shall be refunded in order that repayments may bo spread over a long period. LONDON, August 2. The text issued of Lord Balfour’s note sent to the Allies in reference to the war debts, points out that the war debts, excluding the interest, that are due to Britain at present amount to £3,400,000,000 of which Germany owes £1.450,000,000, Russia £610,000, - 000 and the Allies £1,300,000,000. On the other hand, Britain owes the United States about £680,000,000 at par exchange, together with interest since 1919. No international discussion lias yet taken place. This is an unexampled situation, and* pending a settlement which would go to the root of the problem, Britain is silently abstaining from making any demands upon the Allies for the repayment of either interest or capital. Britain is prepared if such a. pelicy formed part of a. satisfactory international settlement, to remit all the debts due to Britain from the Allies in respect to loans from Germany and in respect to reparations. Recent events have made such a policy difficult of accomplishment, ' because the United States has required Britain to pay the accrued interest on the Anglo-American debt, converting the same, by means of a sinking fund within ft quarter of a

century. The British Government recognised their obligations. Britain is prepared to fulfil the same, but cannot treat t repayment of the Anglo-American loan iis though it were an isolated incident, in which only Britain anl America are

concerned. Lord Balfour’s note continued that tlie British debt- to the United States was but one of a connected series of transactions in which Britain appeared sometimes as a debtor and sometimes as a creditor. Britain’s undoubted obligations as a debtor were to be enforced, her equally undoubted rights as a creditor could not be left wholly in abeyance. Britain whs owed more than she owed. If all the Inter-Allied debts were paid, Britain would be a large gainer. Many of the Allied and associated powers were creditors and debtors between each other. -L_ They were, and are, much more.. Their debts were incurred, and their loans were made, not for the separate advantage of particular states, but for a great common purpose, which in the main, was accomplished. The economic ills from which the world was suffering were due to many causes certainly, including the weight of international indebtedness, with its consequent unhappy effects upon credit, exchange, national production, and international trade. Britain’s policy hitherto, in refusing to make demands upon debtors, wilj only be tolerable so long as it is generally accepted that it was not right that one partner in the oomrnon enterprise should recover all she had lent, and another, while recovering nothing, should be required to pay all she had borrowed. The people of Britain were suffering from an unparalleled burden of taxation, an immense diminution of national wealth, serious unemployment, and a curtailment of useful expenditure. These evils were being courageously borne, but, if increased by a legitimate but one-sided arrangement, the British taxpayer would inevitably ask why he should be singled out to bear a burden which others ought to share. The British Government, therefore with regret, felt constrained to request the rerpective governments to arrange for dealing, to the best of their ability, with their loans. Britain desires - -- to explain that the amount of interest repayment she asks depends n<& so much on the amounts of the Allies debts, to Britain as on what Bntam has so pay America. . The policy which the British .Government favours is the surrendering . of Britain’s share of German reparations, and the writing off, by means of one transaction of the whole holy of interAllied indebtedness. If this is impossible of accomplishment, Britain wishes it understood that she does not, in any event, desire to make a profit from any less satisfactory arrangement. Britain, under no circumstances, proposes to demand more from her debtors than is necessary to pay her creditors. While she does not seek more, all must admit she can hardly be content with less, for it should not be forgotten that Britain’s liabilities were incurred, not for herself, but for others. Britain does not suggest that, either as a matter of justice or expediency, Germany should be relieved of her obligations to Franoe and the other Allies. The Government, speaking only for Britain, are contenting themselves with saking that , they are so deeply convinced of economic injury inflicted on the world by this existing state of things that Britain is propared, subject to the just claims of the other parts, of the Empire, to abandon all further right To German reparations, and all further payments < from the Allies provided this renunciation is part of ft general settlement would be more valuable, to mankind than the most successful enforcement of legal obligations.