BRITAIN WILL PAY

Evening Star, Issue 21284, 13 December 1932, Page 7

BRITAIN WILL PAY

qualifications in note AMERICAN REACTION Press Association—By Telegraph—Copyright WASHINGTON, December 11. Mr H. L, Stimson (Secretary of State) on Sunday received the British Note stating that the December war debt instalment would be paid. AMERICA'S ANSWER NO CONDITIONS ACCEPTABLE. WASHINGTON, December 11. A few hours after Sir Ronald Lindsay delivered to Mr Stimson the British Note saying that payment of the 95,000,000d01, with qualifications, would be made in gold on December 15, Mr Stimson handed Sir Ronald Lindsay America’s answer declaring that the intention to pay bad been noted with satisfaction, but that payment could not be accepted with conditions extending outside the debt funding agreement.” The British Note specified that payment would not be regarded as a resumption of payments under the existing agreement, but as a capital payment of which account should be taiken in any final settlement.” As the nature of the Note is generally what was expected, Mr Stimson’s quick response is interpreted as a move to leave the matter entirely with Britain, with a full understanding that her conditions would be rejected, and that if payment is made it will only be accepted as coming under the existing agreement.

Congressional reaction was immediate and favourable to Mr Stimson’s policy. The first Press reports from England indicated that this policy might fortify those who favour default, and observers here admit that it might create an impasse, but it is believed that the gap between the two Governments is not so wide as might appear, and that the British Note is merely laying the groundwork for future negotiations. RESPONSIBILITY WITH CONGRESS WASHINGTON, December 11. The British Note stated that payment would be made in gold, but was not to be regarded as a resumption of payments on the scale used before the Hoover moratorium. Mr Stirhson handed the United States reply to the British Ambassador. It said: “The Secretary of the Treasury has no authority to accept war debt payments except as provided for in the funding agreement. Congress holds the final decision in respect to changes in intergovernmental obligations, and the acceptance of. the December '’instalment cannot Constitute approval of, or agreement to, any condition or declaration of policy inconsistent with the terms of the agreement.” The Note added that it would seem undesirable that any steps should be taken which, by causing misunderstandings would increase the difficulty that must be overcome in finding an ultimate solution satisfactory to both nations.

It was officially stated in the Note that Mr Stimson took up the position that accepting the payments with conditions was illegal. He explained that Congress must act in changing the funding agreement in any respect. The speed with which the Note was prepared is a direct indication to France of what she must expect if she attempts to supplement her payment with similar conditions. This indication is considered to be exceedingly timely, as the Chamber of Deputies has scheduled a debate on the payment for Monday. Mr Stimson was considerably surprised when the Note was delivered today, as it was not expected until tomorrow. He immediately summoned Mr Mills (Secretary to the Treasury) and several aides, and drafted the Note. The contents were then communicated to Mr Hoover, who approved them. The reply was then delivered to Sir Ronald Lindsay. PAYING IN GOLD LONDON, December 11.

Britain’s decision to pay in gold means that the gold will be earmarked in the vaults of the Bank of England, awaiting America’s instructions. In the case of. two friendly nations no actual transfer takes place. The rumour that France is lending Britain gold to make the payment on December 15 is officially denied, and the suggestion that the payment will involve a second Budget is similarly groundless. The * Daily Telegraph’s ’ diplomatic correspondent says: “The decision not to demand the payments that are shortly due from France, Italy, and other allied debtors raises the question whether the dominions, which are also liable for early payments, will be granted further respite.” GOVERNMENT STATEMENT FREE DISCUSSION IN COMMONS. (British Official Wireless.) RUGBY, December 12. (Received December 13, at 1 p.m.) In response to a request by the Leader of the Opposition (Mr Lansbury) that a Government statement relative to the American debt payment be made in the House of Commons under conditions enabling the House to discuss it,, Mr Baldwin announced that the Government had arranged to devote Wednesday to a debate on this subject. An appropriate statement would be made probably by the Chancellor of the Exchequer. The Government would not put down a motion, and the House would have a perfectly free debate, enabling discussion from every viewpoint.

The Prime Minister reached London from Genova this afternoon. ggd gon-

suited his colleagues, among other matters, on the American reply to the British Note. It is anticipated that the Cabinet will meet to-morrow, when the question of whether a further communication be sent to the United States is expected to be considered. POSITION OF FRANCE M. HERRIOT'S STATEMENT GOVERNMENT IN DANGER PARIS, December 12. (Received December 13, at 1 p.m.) “ France will pay America with reservations,” summarises M. Herriot’s statement on France’s debts policy, which was delivered to a thronged and excited Chamber, resembling a fashionable theatre on a first night. M. Herriot refused to specify the reservations, as he wished to act unitedly with Britain, which had shown admirable loyalty, uprightness, and confidence. The deputies loudly cheered the statement: “Britain on all subjects —but particularly on money matters—is irreproachably upright. She refused to be treated differently from Franco over the payment on the 15th inst.”

M. Herriot said that France had three alternatives —first, payment unreservedly, which was unacceptable; second, refusal to pay, which was also unacceptable. France’s signature must be honoured. All hopes of international peace were based on the sanctity of contracts. The Chamber’s feelings against payment were understandable in view of France’s sacrifices, but the Government had to rise above temporary passions and consider France’s permanent interests. Refusal to pay would intensify anti-French propaganda in America, and jeopardise a future settlement.

The third alternative was to pay with reservations. This was the only possible course. “If -we do not honour our signature I do not see how we can resume negotiations,” he added. The Chamber adjourned till to-mor-row.

Prior to the speech a meeting of Socialists, on whom M. Herriot relies for his majority, rejected payment in any form pending the summoning of a general debts conference. As the Right is uncompromisingly opposed to payment and the Centre also is believed to be hostile, the Government’s position is considered critical, despite the favourable impression created by M. Herriot’s speech.

DEBT REVISION AND DISARMAMENT

ROME PAPER’S CONTENTION. ROME, December 12. (Received December, 13, at 12.30 p.m.) The 1 Osscrvatore Romans,’ in an inspired article, says that the sacrifices demanded of America must not bo disconnected from peace. War debts, reparations, and disarmament are interdependent. If Europe insists on a revision of war debts because they cannot be dissociated from reparations, the United States must insjst on a relation between revision and disarmament.

THE DEBTS BUDGET

MORE PAID THAN RECEIVED

(British Official Wireless.)

RUGBY, December 12

(Received December 13, at noon.)

In written replies to parliamentary questions the Chancellor of the Exchequer gives details showing that Britain’s receipts in war debts amounted to 71.1 millions and 'in reparations to 121.3 millions, making a total of 192.4 million pounds. Her payments to the United States for war debts amounted to 326.2 millions, exceeding the receipts from war debts and reparations by 133.8 millions. He said that if British war debts to the United States had been from the outset settled on the same basis as the French war debts to the United States the amount which the British Government had already paid would exceed the amount due on such a basis by 795,7 million dollars, and no further payments would be due until 1940. Similarly, if British war debts had been settled on the basis of the Italian settlement no further payment would be due until 1955. If, however, past payments were ignored and future payments in respect of the actual capital debt now outstanding were made on the basis of the French settlement the amount payable by Britain on December 13 would be 22,000,000dol instead of 95,500,000d01. Similarly if future payments were made on the basis of the Italian settlement the amount payable would be 2,750,OOOdol instead of 95,500,000d01. Approximately 29 per cent. of the British debt to the United States would have been paid off by the payments already made by Britain if the settlement had been on the same basis as cither the French or Italian settlement. Under the existing settlement only 4 per cent, of the capital debt had been repaid.

AMERICAN GOODS

NO NEED FOR BRITISH EMBARGO. MONTREAL, December 12. (Received December 13, at 9.5 a.m.) Sir Norman Angell, the British author and economist, in an interview today stated: “Britain will not need to put a specific embargo against United States goods if the war debts payments continue, as the pound will depreciate still further, and it will not be possible to buy American goods in the United Kingdom on account of their high price.” BRITAIN’S FUTURE POLICY WASHINGTON, December 12. The American Note ajjparently wishes to clarify the legal status of the British Note, and suggests that conditions

mentioned may bo construed as a simple declaration of Britain’s future policy, which is in no way binding on the United States nor injures the legality of the existing agreement, “It is therefore assumed that in the conditions of payment you are not proposing to make this payment otherwise than in accordance with the terms of the funding agreement, but you are stating your views as to the steps your Government may desire to propose subsequently after re-examination of the whole problem.” Representative Rainey, a prominent member of the Ways and Means Committee, declared .that Mr Stimson’s answer was “ eminently proper.”

Senator Borah said: “ The Secretary of State could not reply in any other way than to say payment could be received only under the terms of the debt funding agreement.” During and after the conference at which the Note was drafted Mr Stimson, Mr Mills, and others appeared to be anything but gloomy. They apparently feel that Britain has now admitted that she has the money to pay and whatever conditions she seeks to attacl) cannot stand against this Administration. It is noted taht she did not request a waiver of the £30,000,000 of principal.

BRITISH PRESS COMMENT LONDON, December 12. The early editions of the London newspapers give prominence to the fact that Britain is going to jsay, but with reservations. The latest editions, however, emphasise that it is contrary to truth to say that “ the United States rejects the British offer.” The details of this latest Note arrived too late for real criticism, and the text has not yet been circulated by the British Foreign Office. ‘The Times’ says: “The very prompt American reply naturally pointed out that the United States Treasury had no authority to accept payment except according to the existing agreement, but,” adds ‘ The Times,’ “ the British Government has done right in x’efusing to make default. It is equally clear that it has done right in coupling the announcement with a plain intimation in regard to payment as a step to final settlement.”

CANADA NOT CONCERNED

LONDON, December 11

Mr R. B. Bennett, the Canadian Prime Minister, on arrival in London, was questioned as to whether ho had brought a Canadian offer to help Britain over with the war debts. He replied that Canada was not concerned with war debts. “ Canada incurred a war debt of 2,000,000,000d01, but we have no inter-governmental debts in this connection either to Britain or to America. Wo abandoned all claim to reparations at Lausanne. The whole of Canada’s war bill is now part of our funded debt.”-