AUSTRIA’S DEBTS

Wairarapa Times-Age, 17 June 1938, Page 8

AUSTRIA’S DEBTS

REPUDIATION INTIMATED BV GERMANY APPEAL TO INTERNATIONAL PRACTICE. INTEREST ON REICH LOANS TO BE REDUCED. By Telegraph—Press Association. Copyright. (Recd This Day, 10.40 a.m.) BREMEN, June 16. Herr Funk, in a speech, said: “In view of international practice, Germany cannot be expected to assume responsibility for Austrian debts. Political debts cannot be converted into commercial debts because private creditors have replaced the State.” He recalled that Britain had refused to recognise the debts of the Boer Republic after the Boer War. The United States had repudiated the debts of the Southern States after the civil War. France had not paid the debts of Madagascar. Money had been lent to Austria merely for the purpose of bolstering up the political system. Although Germany would honour commercial debts, it regarded political debts as detrimental to trade and industry. “Germany,” he said, “cannot tolerate the position of her foreign debts. An arrangement must be made whereby unjustifiable interest rates of 5J to 7 per cent will be reduced. to a more normal level.” Herr Funk added that Nazi Germany had never regarded the Dawes and Young Plan loans as private loans. Herr Funk’s speech is regarded as a formal and official repudiation of Austrian debts, of which eight millions sterling are owing to British investors. British owners also hold 16J millions sterling of the 7 per cent Dawes Loan and eleven millions of the 5J per cent Young Loan.