WAR DEBTS

Southland Times, Issue 18856, 23 June 1920, Page 2

WAR DEBTS

PORTION OF UNITED STATES. LOANS BETWEEN THE ALLIES. In the course of a review of the financial situation Mr Harold Beauchamp at the annual meeting of the Bank of New Zealand dealt at length with war debts and the position of the United States of America and gave the following table, all the figures representing millions, showing the indebtedness between the Governments of the Allied and associate countries, incurred for the purposes of the war:— Loans to ByU.S.A. By U.K. By France Tl. £ £ £ £

“Assuming that the loans from one Ally are not set off against loans to another,” said Mr Beauchamp, “the total volume of inter-ally indebtedness is approximately £3,985,000,000. The United States is a lender only. The United Kingdom has lent about twice as much as she has borrowed. France has borrowed about three times as much as she has lent and the other Allies have been borrowers only. If the United Kingdom were paid half the amount that she has lent, she could easily settle her indebtedness to the tlnited States, but her debtors are quite unable to make repayment ; hence, Britain must, out of her own resources, endeavour to met the situation. The United States is in the favourable position of drawing tribute from all the others, and, her trade balance being heavily in her favour, the American exchange has moved correspondingly heavily against Britain. It must be borne in mind that, while Britain was pouring out for the Allied cause her blood and treasure without stint, the United States of America, already the richest country in the world, was standing aloof, adding enormously to her own wealth by supplying food and munitions to the combatants. It is therefore no cause for shame to Britain, but rather a source of honest pride that the gold standard is temporarily ineffective, because it 4s adirect testimony to the supreme effort put forth by her in the cause of the world’s civilisation. But if the exhausted nations of Europe are to recover/ and business with them be placed on a satisfactory footing with a prospect of ultimate restoration of normal exchanges, it is necessary that they should be helped to produce goods. This means that they must be supplied with raw materials and, in some cases, machinery, and to do this involves supplying them with large credit. “The only country in a position to afford this credit to the necessary extent is the United States, she having suffered less by the war than any other country. At one time it seemed probable that the States would nobly undertake the part in the healing of the wounds of humanity and the reconstruction of shattered civilisation, that cimunstances had placed in her power to perform ; but unfortunately, of late, a feeling of indifference seems to have developed and there appears now to- be an actual indisposition to afford any help. Mr Henry P. Davidson, Chairman of the League of Red Cross Societies, recently urged the vital necessity for Congress to appropriate 500 million dollars for use in Central and Eastern Europe to prevent the complete economic, political, moral and physical collapse which was imminent. The views of official America were recently expressed by Mr Glass, the Secretary of the Treasury, in a statement made just prior to resigning his office to take his seat in the United States Senate. He declared that the Governments of the world must now get out of banking and trade, and that loans of Government to Government not only involve additional taxes or borrowings by the lending Gov-

ernment but also a continuance by the borrowing Government of control over private activities, which only postpones sound solutions of the problems. The Treasury was convinced that the credits required for the economic restoration and revival of trade must be supplied through private channels, and that, as a necessary contribution to that end, the Governments of the world must assist in the restoration of confidence, stability and freedom of commerce by the adoption of sound fiscal policies. It is generally considered that, if the United States persists in this attitude, her action will recoil uppn herself in loss of export trade and consequent growth of unemployment. Already her trade has begun to decline, the exports for April being 135,000,000 dollars less than those for March. If this continues, a'grave financial crisis there may be anticipated. The rudiments of it are already in evidence in the “price-slash-ing” that has been forced upon the merchants and in the restriction of credit by the banks. It is to be hoped that a consideration of these possible effects may yet dispose the State to do something substantial towards the relief of European economic necessities.”

United Kingdom 842 842 France 550 508 1,058 Italy ,. .. 325* 467 35 827 Russia 35 56S 160 766 Belgium .. 80 98 90 268 Serbia and Jugo Slavia 20 20 20 60 Other Allies 35 79 50 164 1,890 1,740 355 3,985