BRITAIN’S DEBT

Hokitika Guardian, 24 July 1926, Page 3

BRITAIN’S DEBT

'.'Australia & N.Z. Cable AssoL.ation LONDON, July 22. Mr Churchill (Chancellor of the Exchequer), in a statement in reply to the American Treasury’s attitude towards the British debt to America, says: ' “Nowise can discrimination against Britain he based on her use of the money which she borrowed from the United States for the prosecution of the war. Britain has not complained of the adverse discrimination with which she lias been treated, but when

discrimination arises from a misconception of the facts, necessary corrections must lie made. It is difficult to understand why the British Treasury’s sales of sterling and of rupees should he included among the British expenditures, seeing that these constituted a purchase of exchange for sterling. These must bo clearly regarded as independent resources. When the Ameri. can Treasury alludes to the 1853 mil lion dollars obtained from our European Allies as a “ reimbursement,” it is forgotten that Britain could have

ibtained many of her requirements

from the British Dominions or elsewhere, hut she arranged for the Allies to obtain supplies from such sources, while Britain obtained supplies from America. While the Allies have repaid Britain a considerable proportion of such expenditure, a large proportion thereof in still included in Britain's debt to America. In any case, the fact remains that the British purchases of American munitions, foodstuffs, etc. essential for prosecution of the war largely exceed the amount that Britain borrowed from the United States. Mr Churchill, continued“ It is quite true that a large part of the British borrowings were spent on the purchase of foodstuffs for civil population, hut obviously, supplies for civilians constituted essential war requirements as food for workmen. Indisputable facts are that money was borrowed by Britain and spent in the United States on United States commodities for a purpose approved bv the United States Treasury in accordance with ' the United States statues for the prosecution of war. Britain provided sterling and neutral currencies to meet her own requirements in war time, and also bore the burden of covering the sterling requirements of her contrentni Allies. Had not the United States, when entering the war, felt unable to relieve Britain of the latter portion of the burden, Britain could have had no expenditure w America from resources placed at the. disposal of her Allies, and then, all m human possibility, the British debt to America would never have been incurred.” , - , , Mr Churchill concluded: "A debtor is bound to comply with the demands of the creditor.” He recalls that Britain, after the Armistice, paid America £.lO 000.000 off the principal of her debt and also £58.000.000 off her war debt interest, but the American Treasury’s statement does not mention the fact. _______