AMERICAN ATTITUDE

Rotorua Morning Post, Volume 1, Issue 98, 16 December 1931, Page 5

AMERICAN ATTITUDE

(Press Assn.-

SECRETARY OF STATE ADMITS REALITIES MUST BE FACED BRITISH BURDEN ILLUSTRATED

— By Telegraph — Copyright.)

WASHINGTON, Monday. Mr. Andrew W. Mellon, the United States' Secretary of State, has made the following statement: "The administration is opposed to debt cancellation. It is, however, the duty of those in authority to deal with the realities, and there is no escaping the fact that some of our debtors cannot meet in full the payments due to us until thefe has been a substantial measure of economic recovery, and that the position of others is so changed as to necessitate consideration of their present situation in the light of existing circumstances. Our debt settlements were effected on the basis of the capacity of the debtors to pay. "Take the case of Great Britain, our best customer. The economic and financial changes of the past year have immensely increased the burden of her payments to us." The Secretary of State outlined the details of the suspension of the gold

standard and the depreciation of the sterling by 32 per cent. He said: "All debts to Great Britain from foreign Governments, exeept feparations payments which are not being eollected this year and are not likely to he eollected in full next year, are payable in sterling. Her debts to us is payable in gold dollars. The combined effect of these unfavourable factors will result in an enormously increased burden on the people of Great Britain. The payments due in the present fiscal year will serve to exemplify the magnitude of the additional burden. With the pound at par the Treasury needs £32,800,000 in order to pay us £159,500,000 dollars. With sterling at the December 10 rate it takes £48,100,000, or in other words, the burden on the British taxpayer would be increased approximately one-half. Basis of Settlement "When the British deht settlement was made it was estimated that the present value at 4 1 per cent. interest rate, was 80 per cent of the total amount due prior to funding, but now the British taxpayer would be asked to meet not the obligation as established by our deht commission, but an amount considerahly in excess of such obligation. Nothing could more forcibly illustrate the duty for re-examining the obligations to our debtors." Mr. Mellon then asks whether anyone believes that Austria and Hungary should he asked to pay their instalments, or Germany make her payments on the cost of army occupation. He adds: "What intelligent business man wonld blindly refuse to investigate or consider the altered circumstances of his debtor?" Mr. Mellon held that Congress should go into the position through a commission composed in part of its own members, to ascertain what 'the facts actually are, and deal with new prohlems as they arise, and concludes: "I am confident that upon mature consideration the President's recommendation for the recreation of the World War Foreign Debt Commission will comm.end itself to Congress."