NEW ATTITUDE

Dominion, Volume 27, Issue 221, 15 June 1934, Page 11

NEW ATTITUDE

America and Payment in Kind INTEREST CREATED I Varied Opinions Held in United States (British Official Wireless.) Kugby, June 13. | The United States Government’s reply to the recent British Note on war debts, handed to Sir Ronald Lindsay, Ambassador in Washington, yesterday, was considered by the British Cabinet at. its usual weekly meeting this morning. In its Note of June 4, the British Government stated that further paymerits would be suspended '.'until it becomes possible to discuss an ultimate settlement of inter-governmental war debts with a reasonable prospect of agreement,” and made it clear that there was no intention to repudiate obligations. The reply says that the American Government is sensible of the difficulty of the situation set forth by his Majesty's Government. including heavy war expenditure undertaken on its own behalf, and on behalf of its allies, the burden of taxation that had been borne by the British people, and the transfer difficulties that. under certain circumstances may arise in foreign exchanges. With certain observations and inferences it is. however, unable to concur, aud in setting forth its ow attitude the United States Government cites the opinion of its AttorneyGeneral that under the Johnson Act debtor nations not at present considered in default because of partial payments made in earlier instalments “would have to pay only the amount of tlie instalment due on June 15. 1934, in order to remain outside the scone of the Act." British Debt Separate. In regard to the British Government’s loans to other allies, and the fact that it has given up great sums due under those loan contracts, the reply again puts forward the American view that these transactions arid the British war debts to America are completely independent. The United States Government expresses the view that the situation calls for the initiation of proposals by the debtor and not by the creditor, and says that it is willing to entertain and discuss informally any proposals for a resumpiton of payments. "For instance,” says the reply, "no proposal bus ever been presented looking toward payments in kind to an extent that might be found mutually practicable and agreeable. Any proposals of this or similar character which promise mutual benefit will be carefully considered for eventual submission to the America)) Congress.” This last passage in the United Slates Note attracts most attention both in America and Britain, since it is the first occasion on which the United States Government has indicated a willingness to accept payment in kind, and incidentally, by so doing, recognised the transfer problem. Views of Congressmen. Press messages from Washington record varied opinions of Coneres-men on the suggestion. Senator Stephens. Chairman of the Commerce Committee, is reported to favour the acceptance of commodities, provided they do not. compete with domestic production or increase unemployment. Mr. H. Rainey thinks the suggestion the best yet made Mr. W. Hill thinks the process of transferring to and from private ownership for Government accounts would be very complicated. Senator A. Robinson thinks that American industry aud workers woui'l be penalised, aud that the scheme is not practical, and Senator Borah thinks it requires further study. President Roosevelt is willing to consider payments in goixis by countries owing war debts only on a partial basis, states a Washington cab.e. Discussing the Note to Britain pertaining to payments due on Friday the President emphasised that the Note was'simply a reply to the British communication pointing out n W!, y °f payment rather than making an offer. DEFAULT BY FRANCE Readiness to Negotiate (Received June 14. 7.40 p.m.) Washington, June 13. France notified the United States today that she’ was not able to pay the i debt instalment due on June 15. but I was prepared to seek a new debt agree ment acceptable to both countries | Administration officials regarded the Note as more conciliatory titan previous , French announcements of default The Note said that the French Government recognised rite validity of iter war debt, but. because of unchanged conditions, would be unable to pay at this time.