Evening star., 1932-04-21
The British Debt.

Chancellor of the Exchequer Cham
! berlains failure to refer to the SILL
| 500 900 of British war debt annuity due
the United States during the coming
year naturally excites wonder as to
whether Great Britain thus is preparing
us for reputation of her obligation.
Such conclusion is at least premature.
When presenting his first budget to the
House of Commons this week, Mr.
Chamberlain specifically announced his
decision to hold in suspense" both rep
aration receipts and debt payments, ex-
planning that this implies no change in
the governments policy. The chancel-
lor of the exchequer categorically stated
that when the Lausanne reparation con-
ference is over this Summer he will
submit to Parliament whatever pro-
posals may be necessary" to effectuate
the measures there agreed upon.
If Lausanne, as is generally expected,
grants Germany an extended mora
torium on reparations, the policy of the
British government, as to which Mr..
Chamberlain says no change Is implied.
presumably will be to adhere to the
celebrated "Balfour memorandum" This
sets forth that Great Britain will de-
mand from her war debtors no more
than she is called upon to pay her cred
tors. Transposed this means that il
John Bull gets nothing from the coun-
tries which owe him money. he will not
pay anything to countries to which he
is himself indebted.
This is roundabout way of saying
that the British look upon reparations
and war debts as inseparable entities.
The temper Of the United States Con-
gress, as presently reflected by BIZ
partisan authorities like Senator Borah.
Republican, and Senator Harrison,
Democrat, is to challenge that view-to
regard reparations as purely European
problem wholly remote from our con-
siderations and war debts as a purely
European American problem which
should not and must be confused with
extraneous matters like inter- European
obligations.
The trouble with that argument
which the United States Government
itself once tenaciously supported, is
that we ourselves, acting first on the
Presidents initiative and then with
congressional approval, married" rep
arations to debts when we agreed to an
all-around intergovernmental morator-
ium in July, 1881. We identified our
selves, in other words, with the Euro
pean thesis of the interrelationship of
reparations and war obligations. An
about-face on that principle will be
required If Europe, when the time
comes, asks us for a fresh period of
grace.
Meantime to impute discourtesy and
impending default to Great Britain is
ungracious and unjustifled. 1t will be
time enough to do that if and when
she crosses the bridge of reputation.
The exchequer is on plausible and busi-
nesSlike ground in counting no outgo
chickens before income birds are
hatched. Budgeting is budgeting, as we
are finding out in Washington these
days. The British want to know what
they are going to have to pay out before
planning to pay it.
They are a legendary creditor nation
The sun never sets on the money that
is owing to il from the four quarters of
the borrowing globe. Britain is bound
to think twice and thrice before setting
an example in the realm of interna-
tional finance which might come dis
agreeably home to her. The cost in
damaged prestige and lost income from
countries themselves thus encouraged
to default would be heavy price for
the British to pay for any gain flowing
from reputation of the American debt
annuity.