IN KIND.

Auckland Star, Volume LXV, Issue 139, 14 June 1934, Page 7

IN KIND.

WAR DEBT PAYMENT AMERICAN PROPOSAL. Reply Note to Britain Offers Negotiation. JBANOE NOTIFIES DEFAULT. (United P.A.-Elcctric Telegraph-Copyright) (Deceived 11 a.m.) WASHINGTON, June 13. The United States Government yesterday replied to the British Note of June 4 regarding -war debts. It suggested that offers would be considered for a readjustment of debt or repayment in goods and services. President Roosevelt is willing to coneider payments in goods by countries owing war debts only on a partial basis, it was declared to-day. Discussing the' Note to Britain Mr. Roosevelt emphasised that it was simply a reply to the British communication pointing out a way of payment rather than making an offer. The Note to the British Ambassador, Sir Ronald Lindsay, from the Secretary of State, Mr. Cordell Hull, set forth three points in reply to Britain. These were:— (1) That Britain would have to pay only the amount of the instalment due on June 15 (about 85,000,000 .dollars), and not the accrued arrears, to avoid being considered in default under the Johnson law. (2) That there is no connection whatever, from the United States Government's standpoint, between the debt owed to the United States by Britain and those owed to Britain by her war allies.

(3) That the United States Government will be glad to entertain proposals either for a readjustment of the debt or for payment in goods and services. Future debt proposals are for Britain to make as debtor, not for America as creditor. The Note added: "The British Government undertook to borrow under its own name and on its own credit standing, and repayment was not contingent upon the fate of the debts due to the British Government." Proposals Invited. The United States Government interpreted the recent British Note as an indication that the British Government did not intend to make any further payments until the United States Government had scaled down ■ the debt to a point acceptable to Britain. Should the British Government wish to put forward proposals for a resumption of payments, the United States Government would be glad to entertain and discuss them informally. No proposal had ever been presented to the United States Government looking toward payments in kind to an extent that might be found mutually practicable and agreeable. Any proposals of this or a similar nature which promised to be of mutual benefit would be carefully considered for eventual submission to Congress. The Note proceeded to quote from President Roosevelt's recent message to Congress, in which he said the United States had no desire to overburden her creditors, but that it was in a. just position to ask that substantial sacrifices be made to meet those debts.

The United States Government was aware of the heavy expenditure incurred by Britain during- the war and the burden of taxation borne by the British people; also the transfer difficulties involved, as outlined in the British Note. However, it could not concur. First Official U.S. Suggestion. The Note reiterated America's position in the historic controversy, and for the first time officially advanced the suggestion that Britain might meet her obligations by payment in kind. No reference, however, was made to any possible goods or services the United States might accept in lieu of cash. France's official notification of default was received yesterday. It is believed now that only Finland will pay in full on June 15, and that Italy perhaps will make a token payment. A motion introduced in the Senate a fortnight ago by Mr. M. E. Tydings (Democrat, Maryland) would authorise the President to make a lump sum gold settlement of the debts due from all the debtor nations, or to accept partial payment in goods and services, as suggested in the American Note. Some observers point out that Britain controls tho world's supply of rubber and predominates in tin production. They predict that an arrangement might be made, under which the British Government could repay part of its debt in those raw materials.