The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, JULY 22nd, 1924. FOREIGN DEBTS.

Hokitika Guardian, 22 July 1924, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, JULY 22nd, 1924. FOREIGN DEBTS.

Investors in England, says a financial journal, have in the last hundred years lent many-millions of money to foreign governments. Until America became possessed of great surplus wealth through the war Gerat Britain provided the bulk of the loans raised bv

foreign States. The money so invested gave Britain a tremendous ndvan-

tage, greatly strengthening its jxisition as tlie financial centre of the world. The income oil such investments was roughly estimated at £‘400,000,000 ler annum, and l»y reason of this it wits possible for the country to sell virtually the whole of its holdings in American securities-for the purpose of financing the huge expenditure of the war. Unfortunately, much of the money invested abroad has been lost, for defaults in the payment of the principal and interest of foreign debts have been numerous. The character of the defaults has differed considerably. Before tho war they were almost confined to South American republics which, finding it an easy matter to borrow millions in London, adopted extravagant spending habits-, and sometimes raised n new loan in order to pay the interest on the old one. These defaults can almost he regarded ns representing the indiscretions of youth, and in the ease of the bigger countries like Argentine, Brazil and Uruguay, tliey were temporary. Moy* among the South American re.

publics, Chile can boast of never having defaulted upon lx»r foreign obligations. The other extreme is provided by Honduras, which a little while age was in the jxisition of being nblo to celebrate her jubilee of default, for non-payment of her debt interest went on uninterruptedly for fifty years. In Europe defaults were a product of tho war. The ease of Russia is quite exceptional, for the Bolsheviks in March, 1917, simply repudiated the foreign debt, incurred by previous Cltuwsiam governments by which they sought to write off the slate a matter of ilpproximately £1,1X10,000.000. At present an Anglo-Soviet Conference is taking place and this matter of tho pre-war debt is a very awkward fence to negotiate. As plainly set out in the Bankers’ Memorandum, which was published oil the opening day of the Conference, there can he no resumption of normal relations U'tween Britain and Russia until investors, merchants and others have full confidence in the future integrity of those who at present nilminister Russian affairs, and Until then the question of a loan to the Soviet Government cannot he seriously entertained. The Soviet Government are not prepared to repay the pre-war debt at its full value; they consider that interest arrears should lie written oil', and the principal reduced, and that only the claims are to lie considered of those who licld Russian Linds before tho revolution broke nut oil March 12, 1917. Even these unacceptable proposals are apparently dependent oil the grant by this country of a long-term loan to the Soviet Government which should he guaranteed by the Blitish Government. In the circumstances it is difficult to see that any good can be the out come of the conference.