WAR DEBTS

Hokitika Guardian, 9 July 1931, Page 3

WAR DEBTS

HOOVER PLAN

GERMAN’S CREDIT TOTTERING

United Press Association.—By Klectm Telegraph—Copyright)

LONDON, July 8,

Financial authorities express the opinion that the delay in the acceptance of President Hoover's plan, and the qualifications now made therein, have minimised the full gains which; would have followed a prompt all-round; acceptance. Funds have left Germany which might have been retained. It is difficult now to stop the exodus, and the “tasks of the Central Banks are made harder by the action of the French Government.

Reports from Berlin state that a fight from the mark, in the form of withdrawals from the .Reich Bank to foreign currency reserves, has continued unabated. Tuesday’s withdrawals amounted to three and a half million sterling. With a view to a restoration of German credit, a thousand business men, industrialists, and bankers have sent a letter to Herr Luther offering to guarantee twenty-five million sterling with the Gold Discount Bank. Herr Luther •in accepting this offer, says, that necessarv measures to create new and strong credit for the institution will he taken most speedily in order to show the world that Germany is . making a great internal effqrt, to re-establish herself financially.

TERMS OF SETTLEMENT

RUGBY, July 7

An agreement was reached late last night between the United States and France, regarding President 'Hoover s proposal. The agreement is expressed in +he follo'vjng terms •

Firstly, the payment of all war debts and reparations to be suspended for one year.

Secondly, the German Government shall continue the payment, of unconditional annuities during this period, but the French Government agr-es. insofar as it is concerned. that + h” payments thus made by Germanv shall be invested 1 bv the bank for international settlement in guaranteed bonds of the German railways.

Thirdly. susnendeTd payments shall bear interest, in accordance with the conditions suggested hv the United States Government,* and shall he repayable % ten annuities from July 1. 1932. Fourthly, the same conditions shall apply to bonds issued hy the German railways. >

On three points not directly concerning the American Government, in observations made by the French Government, they declare, firstly, common action be taken hy the priucpal central banks through the Bank of International Settlement, to organise finance for those European countries who are particularly , affect°d by the proposed suspension of payment. Secondly there should be. an agreement between France and the Bank tor International Settlements to the effect that France should not be called upon to complete the guarantee fund required by the Young Plan, except by equal monthly payments at the demand of the Ba ck for International Settlement. and following the effective, ••v.cfor nayments made : by Germany. Thirdly, so far as concerns of her •. tech nical • - adjustments necessary by the American proposal and the French agreement, a committee of experts to be appointed by the interested (Powers "to reconcile ineeds with the terms of Mr Hoover’s proposals. France res.rves the i;ight to call upon the Reich for a trustworthy guarantee that the savings thus effected in the German Budget will be deposited to .he purpose of economic needs.

Mr MacDonald stated that the Government vas renewing the imitation to the French and United States Governments for a conference in London, -• ■ ■ n eS’-Vijatives' of the Powers chiefly concerned; ;■ . •ju&'^bf’-Whe-. agreement was receivd "‘n - fjonV’on with satisfaction. There 'was- ah immediate ' response on the ":ito6k--"Exchange.- Reports from Paris, ni Berlin claim similar strengthening.

both the political and financial comments .It is emphasised that debt suspension alope . ' will pot ’ .solve the ... world’s 'economic problems; it provides an opportunity for working out a solution .n a" iioplful atmosphere.

WALL, STREET SLUMP

NEW YORK, July 7

The rush to take the profits on the good news of the war debt accord, gave the “bears” an opportunity. On Tuesday. the . market took an initial up turn, but one to three points were quickly lost, giving the market one of the /sharfrs.t. setbacks of the year. Losses, of two to nearly ten points were numerous at the finish. , ‘ „ NEW YORK, July 7.

Stocks, after a. firm opening, broke wide, open, and continued the drop throughout the session, with an increasing downward momentum. No signs of recovery were discernible. A total of over two billion dollars in values was. lost. .• All groups were affected, notahlv '..At .;; vs which drooped over 20. Utilities were weak, and oils, coppers and foods were likewise. RUGBY, July 7.

Mr Dalton, Under Secretary of Wjvn Affairs, questioned as to. the attitude of. different countries to the Hoover proposals,; replied that the att:tudf of. the ' .United . Kingdom, the Dominions and Indian Governments

was, already known. Austria, Bulgaria, ‘Germany, and Italy, had. according to | the information now available, accepted I the proposals unconditionally. Belgium, iCzecho-Slovakia, Greece. .tapan Pnh«d , Portugal, Roumania and Jugo-Slavia acj cepted the propolis in principle, but had. in some cases, it is understood, attached reservations to the acceptance. Hungary had not replied.