The Guardian And Evening Star, with which is in corporated the West Coast Times. SATURDAY, JULY 11, 1931. THE WAR DEBT ADJUSTMENT.

Hokitika Guardian, 11 July 1931, Page 4

The Guardian And Evening Star, with which is in corporated the West Coast Times. SATURDAY, JULY 11, 1931. THE WAR DEBT ADJUSTMENT.

The parties interested did not act too soon in regard to the suspension of war debt payments for a year. Some of the Powers, and notably Germany, was on the brink of financial failure', while but recently the Bank of England had to go to the rescue of Austria. Doubtless as an outcome of the present situation the whole question of war debts and reparations will have to be reopened and considered' in the light of the ability to pay and meet the obligations. With this as a possibility, it is well to recall the British proposal of some little time ago, to wipe out the indebtedness. That proposal now proves to be not only magnanimous, but also the shortest out to solving the huge problem, the war debt settlement is to the parties concerned. > A great load of debt weighs down the nations, and to meet it grinding taxation has to be imposed, and is endured to the best advantage. But there is a limit, and so we find the countries on the eve of default and national ruin. America moved slowly in the matter not accepting .in the first instance the generous lead of the British. Mr Hoover’s action now it appears was only taken in the last extremity. The TJn.ited States as the great creditor nation of the world has come to realise that debts alone aie not tangible assets to ensure a nation’s progress, world owes many millions to the United States, but because of that the nations involved are the poorer in spare cash to trade externally, and the United States has lost markets for her products. That in turn has caused stringency and unemployment in the internal industries, till matters are reaching an impasse. Mr Hoover is probably under no delusion that a year’s respite alone, will suffice to cure the economic ills of the world at large. The countries will still be making' sacrifices in other directions, and there will be little chance to ease national taxation. The help it will afford appears to be too brief and temporary to give a reel boom to world trade—which is what is most and required now to turn the corner out of depression into an easier road to travel. New Zealand for instance, will make some little gain in financial adjustment over the year, but till there is a lifting of trade the means to help towards returning prosperity will be wanting. At present we find our legislators seeking for some art-

ificial way to remove unemployment. The Government scheme is being condemned in various quarters, but there is nothing put forward to improve on the scheme, excepting greater expenditure which means the levying of more taxes to provide the funds. The burden of the debt of any country is the heavier to-day because of the drop in commodity prices. The moment those prices rise, that instant the burden of the debt will be lightened because of the ability to pay through productive channels and not from reserves or economies which in themselces create greater stringency. The money that cannot come from oversea trading must be found by internal revenue from taxation mainly, when State institutions do’ not provide a credit. If this can be altered within the year, Mr Hoover’s scheme will work out better, but if at the end of the year there is the world depression with us still, some other method of working out the war debt adjustment will require to be taken in hand.