The Daily News. SATURDAY, AUGUST 5, 1922. INTERNATIONAL INDEBTEDNESS.
In his recent Note to the Allies with reference to war debts, Earl Balfour has gone to the root cause I of the economic troubles from which the world is' suffering—international indebtedness —with its consequent unhappy effects upon credit, exchange, national production and international trade. Financial experts have been giving this war debts problem very close ■attention, it being recognised that until some feasible . and acceptable agreement has been reached between the debtor and creditor nations, involving certain renunciations and sacrifices, it will be utterly impossible to stabilise economic conditions, or even to ameliorate the evils which at present exist. Lord Balfour’s remedy is simplicity itself, although it depends upon America’s willingness to join in a scheme of renunciation of debts as part of the general plan for bringing about a settlement of the present financial evils. The chief argument used by Lord Balfour is that there is now owing to Britain war debts amounting to £3,400,000,000 : while Britain owes to America £860.000,000, together with interest thereon since 1919. It is evident that America, having more money than she can use because her rate of exchange operates as a bar to the trade which her enormous financial resources ought to command, is not content to allow further latitude with regard to the collection of interest, and has called upon Britain to pay the accrued interest on the Anglo-Amer-iean debt, besides insisting on a conversion scheme whereby Bri-. tain’s debt will, through the medium of a sinking fund, automatically extinguish itself within twenty-five years. Britain is perfectly willing to adopt that courU, but naturally points out that, she cannot treat her debt to America as an isolated incident which only concerns Britain and America. In other words, the money borrowed from America having been used to finance the Allies, Britain cannot shoulder the repayment without calling on the Allies to discharge their debts to Britain. An additional factor in the problem is the debt owing by Germany to the Allies for reparations, and it. is this factor which has a preponderating influence on the scheme outlined by Lord Balfour, because it affects the restoration of trade, the rerehabilitation of exchange, and the peaee of Europe, inasmuch as only a satisfactory settlement of Germany’s financial affairs will put an end to the machinations of the Monarchial reactionaries, and it is reasonably anticipated, ensure a stable and peaceful. government in that country. It is this ■aspect of the situation that has evidently been the operating lever in the proposal to remit the. debt due from Germany to Britain on account of reparations. No doubt feeling runs high in the direction of making Germany pay all she has undertaken to pay, hence the necessity for viewing the proposal in the light of being the lesser of two evils. It will be noticed that Lord Balfour does not suggest, on behalf of Britain, that, either as a matter of justice or expediency, Germany should be relieved of her obligations to France and the other Allies. Britain is merely concerned with the economic injury inflicted on the world by the existing state of things, and out of her inexhaust- j ible fund of sympathy in all cases. , of distress, has expressed a wil-i ’ .lingness to forego all the debts owing to her on account of the war, over and above the amount? she owes to America, but subject to the claims ol J’m other parts of the British Empire. Lord I four’s contention that the British taxpayer ought not to be expected to bear the burden Which others ought to share, is unanswerable., ■ The Allies cannot be blamed for 1 I
insisting on their full pound of flesh from Germany, but they are even more certainly bound not. to add to the enormous sacrifices made on their behalf by Britain by leaving her to settle with America for the money borrowed on their account, while they take no steps to pay their share. The solution of the problem rests with America and the Allies. Britain has made an offer that is remarkable for its great generosity. Lord Balfour has put the position with a moderation and fairness that are worthy of Britain’s best traditions, and it is to be hoped that the scheme outlined will, be favorably received, and eventually take shape. France should be the last to raise obstacles.
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Taranaki Daily News, 5 August 1922, Page 4
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733The Daily News. SATURDAY, AUGUST 5, 1922. INTERNATIONAL INDEBTEDNESS. Taranaki Daily News, 5 August 1922, Page 4
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