WELLINGTON NEWS

Hokitika Guardian, 29 June 1931, Page 7

WELLINGTON NEWS

THE HOOVER VACUUM.

(Special Correspondent)

WELLINGTON, June 24. President Hoover Inis taken a wise important step in offering to the debtors of the American Government a moratorium of twelve months in respect of interest and amortization, .ft must be remembered that the War Debt settlement was made in accordance with an Act of Congress, and the President could not go behind the Act' without being assured of the consent of Congress. President Hoover consulted with leading Senators before making Ids proposal, and since its anonunceinent it has received general endorsement by Senators, including the irrespressibje and somewhat vindictive Senator Borah.

The offer does not amount to a great deal, yet it is of very great importance at the present juncture. All that America has offered is to allow her debtors to postpone payment for twevle months when apparently they resume payment and make up the unpaid amount. Viewed in this light it is a trifling concession and no more than is done every day everywhere by creditors. A debtor in genuine distress is invariably helped by the creditors, net merely in the interests of the creditor also. President Hoover has been highly commended for his action, but, bereft ot all its trmmings it is not much. The proposal is important from quite another point of view. It has been consistency and rigidly maintained by prominent bankers and economists that the War debts were one of the chief causes of the world depression. Sixteen European countries, and countries more or less impoverished through tlio War had to pay triute to America and the payment of that tribute Itas been rendered very difficult owing to America’s refusal to accept payment in goods by raising a high tariff barrier. America herself has suffered for this, and the economic conditions in the United States are nearly as had as they are in Australia.

All the large corporations have eitli. or cut their dividends or passed them all together; domestic trade is dull and poor, plants are working at much fowef capacity, ami the export track of the country has been declining. The year just ended shows a very big deficit. Thus riie world depression that the United Slates'has helped to create has engulfed that country with the rest. As confirming the views of those who contended that the War debts were one of the chief causes of the depression, the mere suggestion of one year’s moratorium has caused a still in markets.

Stocks and shares have moved up sharply in London Aiid New York; the commodity markets show advances, tin which has been subject to a steadily falling market rose with a bound registering an advance of £3 15s per ton. Even-cotton which is one of the principal exports of the United States mov upwards, but what is more than all this it has revived hope which will soon crystalise into confidence. rf tins is the result of a mere proposal on i.io pare ot a.civauo uuu.oa UU il iilOt iUJii ■ iOi’ l u <3i V C monuis, what would ue the enoct u urn war deoio uere women oil ad louiut i_an mere ue any uouul auoui me goon euoce ei mien aceiun i ine quick ia,our.une r;:.-,ponse ot the mu. wets, and tiio lan in.i uheir own simple productcoie./ii bounded upwards, must make some impression upon the American aaiutors, ae a;l dents it is Certain to cause bankers and business men in the United States to urge for a further revision, if not, for cancellation of the War debts.

-President Hoover’s moratorium proposal opens the door wide for renewed consideration of the ethics and psychology of the War debts. France it would appear is obdurate, and in the opinion of many, the Freach have since the war developed a national selfishness and a national narrowness of mind that is inexplicable. But France will lie forced, to join with the other countries, for the French can no more bask in splendid isolation, than have the Americans. The. War debt moratorium although as yet merely a proposal, has opened up a vista of favourable prospects for the early dissipation of the clouds depression.