Evening star., 1932-12-02

| tally different from payments made
by the taxpayer in his own currency,
and the burden of these vast inter-
| governmental debts must be judged by
comparison not with the volume of in
| ternal revenue but with the balance of
trade. So long as the debtor nations
are compelled By every means to aug
ment their export surpluses in order to
meet intergovernmental debt burdens,
they cannot play their part in the nor
NAL economic operations of commerce,
and their diminished purchasing power
will reflect itself in diminished receipts
! for producers in the creditor country,
with consequent fall in prices, depres-
sion of industry and unemployment.
Even a partial recovery Of business
activity in creditor countries as a con-
sequence Of the removal of these alb
normal conditions would result in addi-
tional receipts from tax on the existing
scale which would compensate the ex-
chequerS of the creditor countries many
| times over for the loss of revenues in
volved in revision of the war debt
settlements.
IL The loss which both the United
Kingdom and the United States tax
payers would suffer from reconsidera-
ton of the war debts cannot be meas
ured in the same scales as the untold
loss of wealth and human misery caused
by the present economic crisis. The
value of international trade had al
ready six months ago decreased in
three years by SO per cent, or by the
equivalent of S500O,000 for every hour,
night and day, that passes, and the
situation has since detericrated even
further. It will not profit q creditor
country to collect few million pounds
or dollars if it thereby perpetuates
world disorder which, reacting on itself,
| involves losses of revenue many times
greater. And a settlement, however
generous 1t may seem, which relieves
the economic machinery of the world
by clearing up these intergovenmental
payments would be repaid again and
again by the contribution which it
would make to world revival.
Potentiali!ies Unimpaired.
IS. For this loss and suffering is not
due to the niggardliness of nature.
The triumphs OF physical science are
ever growing and the vast potentialities
of the production of real wealth remain
unimpaired. 1t is in the power of the
governments of the world. and particu-
larly Of the United States and of the
OIliIEO I1ll6QOIl oo bilC b"O SASoSSoN
creditor nations. If they unite in CO.
operating, to make the first and essen
tial step toward averting disaster, f1nan-
cial, economic and political.
16. For the reasons given in the pre-
ceding paragraphs his majesty's gov
ernment base their request for a re-
examination of the whole situation on
the fact that payment of the war debts
has IN their view been proved to be in
consistent with the present economic
organization of the world and that any
resumption of these payments is bound
to accentuate the gravity of the present
crisis and to compromise fatally all
efforts to counteract it. But apart
from these general considerations, his
maiesty'S government hold the sincere
conviction that this request Is fully
justified on the grounds of the past
record of the United Kingdom in the
matter of intergovernmental debts and
of their present position.
II. In the first place they would
draw attention to the unprecedented
efforts which have been made by the
United Kingdom. The total British
war expenditure in the United States
amounted to approximately Sl2,0O0,-
600 900 (f2, 400, ,0o0,0 ,000). OF this total
only about one-third was financed by
borrowing from the United States Gov
ernment. Approximately $3,000,000,00o
(s6O0 100000 was obtained by the sale
of gold and of securities representing
available capital assets which His
Majesty's Government had at its dis
posal the transfer of which has OF
course reduced the permanent wealth
of this country In addition His Maj
esty's Government raised commercial
4I,N Init tot
before the entry of the United States
into the war to the amount OF about
SI.480. 100000 (f304 900 900 at par).
The balance of the British war expend-
iture in the United States was financed
by the export of British goods and by
the reimbursement on the part OF the
United States Government OF eXpendl-
ture incurred by His Majasty's Govern
ment on behalf Of the Allies and OF
sterling supplied by His Majesty's Gov
ernment to the United States troops.
OF these market borrowings 81, ,340, ,00O,-
900 GETS, ,000,000) have been repaid. In
respect of the debt to the United States
Government payments have been maoe
amounting to. 81 1852 100000 tf278,000,-
600 at par), OF which S2O2,0OO,O 600
ts42,0oo 900 at parl were In respect OF
the principal of the debt as funded.
Furthermore in addition to the pay
ments under the funding agreement
His Majestys Government have paid
S233, 600 900 (e48, 8,000,000) in respect OF
war debt before funding and they have
repaid in full both the loan for the
purchase of silver amounting to $l22,-
100000 and the debt of $16,000,0O0 Tor
relief supplies to Austria. The total OF
these debt payments which His MaJes-
tvs Government have made to the
United States since the war amount
to the sum of $3.o63, 100000 $685.
000,000).
Had Claims on Allies.
IS. Meanwhile the United Kingdom
had claims on its Allies in respect OF
the war loans it had made. The ad-
vances made by this country amounted,
as stated above, to fl,60O, ,0O0,0o0
sequently by the addition of unpaid
interest to the capital. Shortly after
the war His Majesty's Government
offered to join in any equitable ar
rangement for the reduction or cancel
lation of inter-allied debts provided it
was of an alI-around character. That
proposal was not accepted and His
Majesty's Government were called upon
to fund their debt to the United States
of America. They then announced that
they would limit their demands on
their own debtors to the amount that
they were themselves required to pay
to their creditor. The fact that His
Majesty's Government were the first to
fund their debt to the United States
of America, and that some time elapsed
before their debtors completed funding
agreements with them, has resulted in
their receipts from their debtors being
less than half their payments to their
creditor The relative position is that
the United States of America made
loans amounting to $4,000, 100000
(E2055, ,000,000) and the United King
dom made similar loans amounting to
1900 100000 (f1, ,60o,000,000); the
United States have received for the
benefit of their tax payers s2,112, 600, 900
(f434, ,000,000) and the United King
dom have received for the benefit OF