WELLINGTON NEWS

Hokitika Guardian, 8 January 1927, Page 1

WELLINGTON NEWS

THE UNITED STATES DANGER. (Special to “ Guardian.”) WELLINGTON. January I. The United ,Stale: 4 is now '•fry mini: on the map of the t world, and the conditions .in America have therefore a world-wide interest. The United States is prosperous, “too prosperous” says Mr A. P. Kelton. a prosperous hanker of Massachusetts, and adds:

“ The very things that made us great will he our undoing." There is no doubt about this. American wealth has enormously increased as the result of exploiting the Allies during the war and particularly Great Britain, who had to sponsor American loans to the Allies and when the time came for settlement America did not forget to exact her pound of llesh. Of course she had a right to call upon her debtors to meet their obligations, and Britishers everywhere must he pro'ud of the fact that Britain was the first to fund her American debt, and has since p.aid interest and sinking fund punctually on due date. And there were neriods when the exchange value! of the sovereign was considerably he-: low the dollar parity. The steady and! uncompromising adherence to meeting, her financial obligations has won the! admiration of eminent American hank-j c:s and financiers and many of the leading New York papers have been I fulsome in their praise of British fin-, uncial methods, and this was particularly the ease when in May last the nound sterling reaehed gold parity for the first time in 10 years. It is but fair to say that. Britain had had the cordial support and the full sympathy of the American financiers who have shown a remarkable willingness to help, hut the American politician, whose ways are inscrutable, has been opposed to any leniency being shown to the debtor nations. ‘Returning to the remarks of Mr Felton, who by the way is one of the happy holiday-mak-ers on the palatial liner C'arinthia. which visited Auckland and Wellington a few .days ago. Mr Felton says the Americans do not sense the value of their wealth, and unless they are very careful they will lose their anchorage. The greatest danger confronting the nation is extra.vagnneoe. lack of sohriery and lack of quiet decent living. The symptoms displayed by tbo U.S. are just tlie same symptoms-that would ho displayed by an individual 1 who has suddenly and unexpectedly acquired great wealth. The national inclination is to plunge into extravagance. and it is very hard to resist the desire. There is money to burn, then whv worry ?

America has had several indications during the past year that she is on the wav to outdistancing the proverbial constable, but none of the events have been sufficiently large to cause any real disturbances. They will, and must, have a cumulative effect. Air Felton agrees that it is quite impossible for the U.S. to go on selling and accumulating wealth. As some time or other she would have to buy more, and when that time arrives the pestiferous American politicians will be forced into a thinking mood and will Ire forced to change tlieir tactics. So far as possible America has insisted that she shall be paid not in goods or services but in sterling which adds to the burdens of the debtor nations and surfeits her existing plethora of gold. “Rigour” is too weak rather than too strong a descriptive epithet. Yet stress mst be laid on the fact tha-t Britain has not asked to be released from her bond; and it is because she has shotjn herself ready to meet her obligations that her credit stands high

in the we. Id. Britain did offer to cancel the debts owi”g to her il tJi:• debts owing by her wireais.i cancelled, but the American politicians would have none of this. Recently the professors at Columbia University petitioned tile Presideent to cancel the war debts, or in the alternative to agree to a substantia! reduction, hut the answer they leccivcd was that their position was not helpful. -Mr Felton says there is no doubt that flic United States is entering an era of strong competition and there will have to he very largo- economies in living and wages and conservation of the things in which the Ainereians have been extravagant during the oast few years. The nations indebted to the United States cannot pay in gold. They must pay in goods and services, if not direct to the United States, then through the countries with whom America has important trade relations. Gold will be used as far as possible in meeting debt payments, hut the yellow metal is not wanted bv American hankers, tor it merely helps to spread extravagance, h; the present year there is hound to he some very seriobs financial disturbances in the United States, which may have fer-rcaeliing effects.