WAR DEBTS

Rotorua Morning Post, Volume 2, Issue 451, 8 February 1933, Page 7

WAR DEBTS

common sense SLIGHT BURDEN PER HEAD ON POPULATION OF U.S.A. PIRM'S ARGUMENT. (Published by Arrangement with the Auckland Provincial Executive of the Farmers' Union.) The firm of Messrs. Munds, Winslow and Potter, of New Yorlc, have issued a remarkable cireular to their elients,, extracts from which are given in the Liverpool Post. They state. — "If we are to accept Press dispatehes quoting the utterances of political leaders from various parts of the country as an index, we are justified in the assumption that opposition to reconsideration of the inter-govern-mental debt problem eomes chiefly from the agricultural districts of the South and West. "In these areas we have thirtytwo States south of Potomac and Ohio arid west of the Mississippi. While some sections of the Middle West, east of the Mississippi River, and certain localities of the North and East have expressed opposition to a reconsideration of the question, sentiment has by no means the unanimity indicated in the South and West. "The thirty-two . States referred to have a population, according to the latest census, of about 60,6000,000. For the fiscal year ended June, 1931 they paid approximately only 191 per cent. of the revenue derived from the income and corporation taxes. Another Burden. "The annual burden to which the l citizens of these thirty-two States I would be subjeeted, even by a eomplete cancellation of the debts, would I be about 78 cents per capita. This I would be about one-fifth of that which j would be borne by the citizens of the sixteen States of the Middle West, North, and East which are less hostile to and, in certain important areas, even favourable to a new study of the problem. "We might take a look at the individual position of several States. Even if the annual p-ayment of £50,000,000 should be forgone, the additional burden that would fall upon the State of Mississippi would be approximately 10 cents per capita per annum. "The citizens of Arkansas would have their tax burden increased to the extent of 12 cents per capita. Kansas is an agricultural State, deriving, of course, a fairly large portion of her income from petroleum. Yet, in the event of complete cancellation, the inhabitants of Kansas would find themselves burdened by an annual addition of only 95 cents per capita. It might be stated in passing that very little of this impost would be borne by the agricultural community, as most of these direct taxes fall upon merchants, manufacturers, oil producers, etc. Who Would Benefit. "In the above outline will be found a fair picture of the burden that would fall on the population of the thirtytwo States whose attitude toward a ; reconsideration of the inter-govern-mental debts as interpreted by their representatives in Congress, is one of unyielding opposition. I "The thirty-two States above menj tioned produce 63 per cent. of the | nation's meat products, 73 per cent. ' oi' exportable grains, all of our cotton, | practically all of our eopper, and 95 ! per cent. of our petroleum. Gbviously, with a reetoration of world trade | these States, which would bear but a | small part of the burden of debt rei vision, would be outstanding benefi- ! ciaries. An advance of 21 cents per | pound in cotton would mean over | £32,000,000 increased value for a | thirteen-million bade erop. An adJ 1 vance of 20 cents per bushel in wheat ; j would add £26,000,000 to the value of I i a crop of 650,000,000 bushels. J "Owing to our special interest in ; cotton and wheat we have taken exi amples illustrating the effect on these ! two commodities. The State of Mis- ■ sissippi, burdened by 10 cents per : capita per annum, by complete can- | cellation, would receive an increased ! income of £2 7s 6d per capital from ! an advance of 2Jd cents per pound in i the price of cotton. j "Arkansas, carrying an added im- ! post of 12 cents per capital would : find its economie position improved | to the extent of £2 11s per capital ensuing from an advance of 2i cents ' per pound in the case of cotton. Kansas burdened with an additional 95 cents would benefit by £2 8s 8d per capita through an advance of 20 cents per bushel n the price of wheat. : "We do not regard this recovery in commodity prices as a mere theoretical assumption. One of the chief con- | tributory causes of the present low ' commodity level is the dislocation of | , cxchanges arising from the necessity I j of making payments in dollars to the | : United States. ! ££In order to meet this situaton, the [ , debtor countries have resorted to their I only recourse — cutting down their I ' imports and speeding up their exports ! i in an effort to obtain a balance of I I trade. This has produced a dual j | strangulation of commerce, acting as ; a bar to the free flow of our raw ma1 1 terals abroad, and increasing the pro- [ j duction to, and competition in, the ! J output of manufactured goods. ! i "We are firmly eonvinced, even j i granting some increase in our tax ! | burden arising from the settlement of 1 1 war debts, that we would see all mar1 1 kets, commodities, and securities_ alike, I j register an emphatic reflection in the ' form of rapidly-rising prices that would more than compensate for the co-op'erative sacrifice we had made."