DEBTS & DIPLOMACY

Wairarapa Times-Age, 30 June 1938, Page 11

DEBTS & DIPLOMACY

(To the Editor.) Sir,—lf our foreign creditors were to fund our debts at 4 per cent, payable every year for 50 years, when both capital and interest would be considered paid, would we not eagerly seize the chance? Yet that is what America agreed to do with the £B3O odd million war debt. The terms were as follows:—160 million dollars a year for 10 years and 180 million for the next 50 years, expiring in 1987, Why has this arrangement been repudiated? Is it that London cannot pay? One hundred and eighty million dollars a year means 5J million ounces of gold at 35 dollars to the ounce. The Bank of England and the Exchange Equalisation Account hold 99J million ounces of gold between them—enough gold to pay the debt for the next 18 years, to say nothing of the hundreds of millions’ worth of gold held by the bullion firms who deal in gold. So how can it be want of money? Especially as Canada, South Africa and Australia are sending about 15 million ounces of gold to London every year —enough to pay the debt to America nearly three times over. But that is not all. The “Economic Survey,” issued by the League of Nations, says that between January, 1935, and September, 1936, over 2000 million dollars had been sent over to America and lodged with the banks for the purpose of buying American securities and shares in American companies. Are the speculators going to do with America what they did so easily with Central Europe?—take advantage of the fall of the dollar to sell up the whole country? No doubt the diplomats are gods in power, but are they also gods in wisdom? If they had not been positively certain that Russia would never be a menace again, would they have carved Central Europe up into small States, each with a whole sheaf of grievances, and quite helpless against a superior outside enemy? That is what the Treaty of Versailles did.

And are they not now spending millions of money and risking the peace of Europe in a vain effort to put together again the diplomatic crockery that the Treaty of Versailles smashed? Again, if America had not come into the late war when Russia went out, who would have won the war? Is it now so absolutely certain that we will never again get into the same fix that we were in when Russia went out of the war and made peace with the enemy? Is it worth while to incur the illwill of a great and powerful nation like America, ignoring all the risks and virtually staking the fate of the Empire on the chance, the very doubtful chance, of never needing America’s friendship and help, merely to save a fraction of the enormous stocks of gold that London—the Babylon of today—holds? It was said of Babylon: “They shall hate her and burn her with fire. For strong is the Lord, who hath said it.” —Yours, etc., HANS C. THOMSEN. Masterton, June 25.