The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY DECEMBER 21, 1933. THE WAR DEBTS

Hokitika Guardian, 21 December 1933, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY DECEMBER 21, 1933. THE WAR DEBTS

The war debts are a continuing difficulty in the adjustment of wond affairs. This month some more token payments are being made to the United 'States in preference to the open default made by other nations. The token payments are sufficient to save the position for the time* being, and are made evidently in the hope of some scaling down or adjustment by which the aggregate of payments may in the end be on some equality. These debts are regarded as one of the greatest obstacles to economic stabilisation .throughout the world. . Yet America insists on. payment. It becomes more and more plain by the general condition of world affairs that debtor nations are unable to meet tlieir obligations. An impartial observer remarks that it is a physical impossibility for a creditor nation which maintains a favourable balance of trade, to collect vast sums abroad, however willing her debtors may be to pay. Yet this has not been recognised by the overwhelming majority of Americans and their insistence on payment has greatly aggravated the position. A “Times” special correspondent says that of late there has been a change in the attitude of many Americans to this question'. The Boston Monitor lias been collecting the views of the editors of representative American newspapers, and it announced recently thati there was In decided majority in favour of cancellation or downward revision. It printed an article from which the following may be quoted: “To transfer money from any country to another there are only three methods. One. nayment in gold, is strictly limited to the surplus of gold in debtor countries. And the world's gold supply is itself so small That enough h not available for a continual oneway How of payments. Even the United States, potentially the world’s wealthiest country, was forced this year to stop its gold payments. Second method, payment ih domestic paper currencies, is also limited be-

cause to be valuable these currencies ina.iL ue convertible into gold and gold becomes the real means of payment. Finally there is the customary method of international payments—in foreign exchange. ‘But for a debtor country to acquire the currency of its creditor it must have a. trade surplus to convert into cash credits. There is no other method. This presupposes both a surplus selling on the part of the debtor and a surplus buying on the part of the creditor. Capacity to receive’ must be evinced by the United States to take debts in this form, arid yet to-day the American tariff wall is higher than at any time in history, it is augmented by a depreciated currency which automatically elevates :it one-third more against gold countries, and there is talk of special N.R.A. tariff protection!” This is probably not a new statement of the position, but it indicates a livelier interest in the problem, and that an increasing number of people in the United States are beginning to recognise the true position. America lias „ a good way t,o go along the new vista opening up, and if the country were free of its other troubles progress might be quicker. The United States is i n the throes of an attempt at national recovery from within, and apparently is giving no' thought of the. aid which might come from without if there Were ordered means of doing so. In other words, international trading requires to be revived oh a basis which will permit of exchange transactions to assist in the discharge of obligations at present beyond the means of redemption.