NATIONS’ DEBT

Hokitika Guardian, 28 June 1933, Page 5

NATIONS’ DEBT

LOAN REPAYMENTS immediate relief problem. (Brihsh Official Wireless.) RUGBY, June 26. At a public meeting of tii.3 subcommitijion of tiie Economic Coulorence dealing with the imnied.ate monetary and financial measures, Air Chamberlain referred to the need for adequate safeguards, i n addition to re-es-tablishment of confidence,' in the internal stability of Europe, before normal international leadunr could be resumed. He .said that the immediate problem was not fresh lending, but repayment of existing loans. A general rise in world prices might materially improve the stuation to the advantage of the debtor, but there were some cases where temporary adjustments might be necessary to assist the debtor,3 to fulfil external engagements as far as possible in the existing circumstances.

No universal rule could be applied. The natural method of procedure was negotiation between the debtors who knew, their own difficulties and the creditors whose argent was required to any derogation of their right. Hero difficulty • frequently arose beenuso there was nP one, who could speak with authority in negotiating with creditors. In Britain since 18Q8«they had such an organisaton in the Council of Foreign Bondholders, which has .successfully dealt with debts amounting to many millions. Ho urged that Governments of various countries should encourage, tile creation of such organisations where they did not exist, but the conditions varied, go much as between the different debtor countries, and as between the different classes of creditors that he would deprecate an attempt to lay down toej/Tigid a procedure..' sAn authoritative and impartial body which could give advice was wanted. He moved that the matter be referred to careful detailed consideration by the Drafting Committee. S'enatoj; Cousins of the UVS.A. do-, legation, said he did not believe that prices . could :be raised by : • monetary means alone, nor did he believe that prices could or should • bfe raised sufficiently to effect an equilibrium with tb? structure of, debts-now existing. Prices must be raised, and the United Stater,. was. acting on that conviction, through measures to increase purchasing power. Enterprise- would not recover .until given -a lead from the Government.

The United States was undertaking the largest programme of public works in her history, and-this would energise production and consumption everywhere. Adoption of such a policy by other countries, in concert with America, would exert a steadying influence on foreign; exchanges. .At the same time, the burden of debts must be lightened. This was not an invitation to those able to pay to scale down obligations. Still less was it an invitation to default, but it empha4?ed the necessity for organising creditors throughout the world, and establishing some permanent body‘to act in an advisory capacity between organised creditors and organised debtors and to study by what means necessary adjustments might be effected with a minimum of delay and injustice.