The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, MARCH 4, 1931

Hokitika Guardian, 4 March 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, MARCH 4, 1931

WAR DEBTS. The war has much to answer for outside of the effects of the immediate conflict. Great and disastrous though the toll of the war was in human life and broken lives, together with the

wanton destruction of property the aftermath of the war carries in its train constant reminders of the toll of posterity, and the burden that is left to redeem the debts incurred over the period of the long drawn out contest for national supremacy. The cost of the war was enormous, but during its progress there was little thought of counting that cost. It was essential for national security to win through at any cost, but since the period of peace there- has been ample time to count the cost and speculate on the effect of the enormous debt the nations are bearing. There is no doubt it is this cost and burden which lias upset the equilibrium of world finance, and brought about- a period of difficulty which the ablest minds are unable to counter or even to meet adequately. On all sides nations involved, are looking for some means of easing the position, ami the economic effect caused by the heavy drain of regularly recurring war payments. A'ictor and vanquished are affected alike. But. as a northern writer remarks apparently protests made in every civilised country against the monstrous burden of war debts are beginning to produce a definite impression oven in the I nited States. Tim world at present owes the Americans about £'2,100.0d0.000, and

the effort to keep even the interest going is paralysing the economic and financial activities of Europe. When it is remembered that Britain I.« paying off her debt to America at the rate ol C'iOJ.ODO a day, and that she has agreed to go on doing it for more than sixty years, there is some idea ol what the-e colos-nl obligations entail; and even the Americans tire beginning to realise that, as the Secretary of War put it the other day, this sort cl thing js doing no good to the trade of the United States. Alter all appeals on equitable and ethical grounds have failed, perhaps fie commercial argument has some small chance ol success,. Anyhow, Mr P. -I. Hurley, who is a leading member of the Hoover Cabinet, “has suggested a plan for a progressive reduction of war debts” to the total extent of 36 per cent. This W|oulU ertainly make a vast difference to the economic situation ih Europe; aim especially ih Britain, ami tlioilgli the motives behind the proposal are lather self-interested than generous, the debtor countries would greet this respite with unmoastued gratitude atiff relief. Thyre is one feature of this war debt problem which is now" attracting the special attention of financial experts at Home. As Mr F. W. Hirst, a dist-ingishc-d economist, has recently (jointed out, “an ounce of gold has now double or more purehnsI ewer than when Britain incurred her debt to America.” This moans that., while the continuous fall in prices involves a corresponding increase in the purchasing (lower of gold, a constantly increasing quantity of commodities must he produced to exchange for the amount of gold required for the payment of any given debt, and the process lias only got to go on long enough to mean ruin to everybody concerned. This fact, Air Hirst maintains, constitutes an extremely strong argument for “the readjustment of the war debts and reparation obligations which were con. traoted when gold was much less valuable- than it is now.” The decision of Franco to pay her debts to England in depreciated francs was really a protest against this “automatic increase” in her liabilities, and sooner or later iho rest of the world may he forced to follow suit. Those general conditions show the complicated state of affairs involved, and the difficulty there will he in unravelling the problem with any speed or great measure of satisfaction.