DEBT AGREEMENT

Manawatu Standard, Volume LIV, Issue 289, 3 November 1934, Page 7

DEBT AGREEMENT

BRITAIN AND GERMANY

A PROMISING DOCUMENT.

COMMENT IN PRESS,

(United Press Association—By Electric Telegraph. —Copyright?) - - - (British Official Wireless.) Received November 3, 11.55 a.m. RUGBY, Nov. 2.

The Anglo-German agreement on past debts and future trade, initialled yesterday, is heralded by the British newspapers as distinctly more promising than the clearing agreement which seemed likely to result.

The Times thinks that while, the countries may find cause for gratification in the arrangement, which should prove of mutual benefit, it would he well to emphasise that the new agreement is experimental. The Times pays a tribute to Sir Frederick Leith-ltoss and adds: Avoidance of a clearing agreement may well be claimed as a triumph for friendly negotiations, for which due . credit should also be given to the conciliatory spirit shown by Dr Schacht and the German Government.

Press messages from Berlin say the agreement is warmly welcomed in business circles there.

TERMS OE AGREEMENT

INTEREST. ON LOANS

(British Official Wireless.) RUGBY, Nov. 1

In his statement in the House of Commons on the German debt negotiations, Mr W. Runciman recalled that toward the end of the negotiations the German Government putforward a proposal with the object of safeguarding the payment for current exports of the United Kingdom goods to Germany and enabling outstanding debts to- be liquidated without setting up a clearing system. The basis of this i>roposai was that the German Government will guarantee that 55 per cent, of the value of German exports to the United Kingdom shall be definitely earmarked for the payment of United Kingdom exports to Germany. This allocation should, according to the normal trend of Anglo-German trade, be sufficient to ensure full payment. The lteichsbank will provide immediately, not less than £400,000 for the liquidation of outstanding com mercial debts, and will also, expedite their liquidation by the realisation of outstanding German commercial claims on the United Kingdom, whether by credit operation or otherwise. Insofar as these measures are not sufficient the Reichsbank will set aside ail additional percentage, provisionally fixed at 10 per cent, of the value of German exports to the United Kingdom, sufficient to ensure liquidation of all the outstanding debts within 12 months. Sondermarks standing in the special account under the exchange agreement of August last, as well as those waiting to go into that account, will continue to be sold by the Bank of England, and further arrangements will be made whereby, with the help of credit operation, and, if necessary, of the charge upon the 55 per cent, earmarked for current trade purposes, Sondermarks will be liquidated within three months.

. At the outset foreign certificates for imports of United Kingdom goods into Germany will be issued without restriction, but the German Government, after consultation with the British Government, may temporarily restrict the issue of such certificates. But in exercising this control they will give special consideration to exports to Germany which are particularly important to Britain, namely coal and coke, herrings, yarns, tissues, and textile manufactures.

The German Government further agree that they will continue, as from January 1 next, to pay full interest on the bonds of the Dawes and Young Loans in the beneficial ownership of British holders on June 15 last, and will offer to British holders of nonReich loans 4 per cent, funding bonds guaranteed by the German Government and exempt from transfer restrictions on the understanding that British holders who accept this offer will take the funding bonds in full settlement of any coupons funded. Mr Runciman said the agreement reached embodied these arrangements. In case it should not prove successful provision had been made for its replacement by a clearing 'arrangement.