Evening star., 1934-06-05
Britain Stops Payment.

With delivery of a note from Great
Britain stating that she is "reluct-
antly compelled" to suspend all fur
ther payments, the thorny problem of
the war debts enters upon a new
phase that may we'll tusn out to be
the final one. Faced h the certain
prospect under the Johnson act of
being branded as defaulters if they
continued the practice of making even
fragmentary token" payments, the
British will discontinue payments of
any kind until it becomes possible to
discuss an ultimate settlement of in
tergovernmental war debts with a
reasonable prospect of agreement"
His majestys government insists that
there is mo intention of repudiating"
its obligations and that it will be
prepared to enter upon further dis
cussion of the subject at any time
when in the opinion of the President
such discussion would be likely to
produce results of value"
Britain having cast the die and
invited the stigma of default, our
other debtors will presumably follow
her lead, and the four or five which
have, like her, made token payments
during the past year, will also prob
ably cease rendering these stipends.
Thus the prospect now is that the
bagatelle due from Finland, which
will maintain its honorable distinction
of being the sole debtor to keep a
clean slate at Washington, is the
only installment that will be paid on
June Is or at subsequent semi-annual
periods.
The British are naturally con-
strained to Put as good a face as
possible on their non-payment atti-
tude, believed to be without parallel
in their stainless fiscal history. They
point out that although they have
paid s2,O25 100000 on an original
Indebtedness of s4.277 100000, the to-
tai still owed, as of June IS, amounts
to S4,713,785,OOO.
The British remind us that far
more favorable settlement terms were
extended to some Of our other debt
orS, and call attention to the high
rate of taxation borne by the British
people in order to achieve the recent
balancing of their budget. Finally,
stress is laid upon the difficulties in
herent in transfer of large debt pay
ments and upon the chaos that would
be inevitable in the field of sterling
and dollars exchange Broadly, their
plea is that as they are demanding
no payments from their own war
debtors, the British should not be
called upon to pay the United States.
This is the theory underlying the old
time "Balfour declaration"
Matching the British note against
the American debt thesis as elucidated
anew by President Roosevelt's mes
sage to Congress, it is plain that there
is yawning difference between the
United States conception of the
issue and Europe's attitude. In
consequence, the outlook for recon-
Cling the divergent positions seems
hopeless in the extreme. The United
States, under powers just voted the
President by Congress, is about to
embark upon negotiations for recipro-
cal tariff treaties. Perhaps in the
realm of trade, and in the give-and-
take opportunities it presents, states
manship will discover some way out
OF the debt deadlock. 1t is a stale
mate that bodies no good for inter-
national friendship and world peace.
1t is a challenge to all the govern
ments involved to leave no recourse
untried to remove it as a cause of
irritation.