PAYING HER DEBT.

New Zealand Herald, Volume LX, Issue 18584, 17 December 1923, Page 9

PAYING HER DEBT.

BRITISH TRIBUTE TO U.S.A.

INSTALMENT OF 92,000,000 DOL.

161,000,000 DOL. PAID THIS YEAR By Telegraph— Association —Copyright (Received 4.5 p.m.) A. and N.Z. NEW YORK, Dec. 15. Britain will pay to.. the United States to-day 92,000,G00 dollars, of which 23,000,000 dollars is the first annual instalment on account of principal, and 69,000,000 dollars, the second semi-an-nual interest instalment. The entire transaction will be in terms of Liberty Bonds under the provisions of the debt funding agreement, Britain thereby saving 1,400,000 dollars, since the bonds were purchased at 98 and in- j terest payment upon them received by Britain was duo to-day. ] Britain's payments, under the debt funding scheme €hus far total | 161,000,000 dollars.

THE SCHEME OP PAYMENT.

ANNUITIES FOR 62 ' YEARS.

By the scheme for funding Britain debt to the United States the principal is to be repaid in annual instalments, according Co a fixed schedule, and interest on the outstanding balance is payable semi-annually on the dates and at the rates of interest mentioned below :— Principal: — To be paid in annual instalments according to a fixed schedule. The instalments will increase each year during the life of the bonds until, at the end of the 62nd year, the aggregate of the instalments equals the principal of the debt. The right! is reserved to the British Government to repay additional amounts of ■ principal'on any interest date upon 90 days' previous notice. Interest:— To he payable on June 15 and December 15 in each year at the following rates: (i.) 3 per cent, semi-annually June 15, 1923, to December 15, 1932, inclusive. (ii.) 3i per cent. semi-annually June 15, 1933, until final payment. The capital sum thus to be repaid in 62 years with interest is 4,600,000,0 CX) dollars, Britain having paid in cash an odd amount of 4,128,036 dollars to reduce the principal to round figures. In round figures on the basis of a 62-year term, Che arrangement calls for an annuity of 161,000,000 dollars for 10 years and an annuity varying between 179,000,000 and 187,000,000 dollars for 52 years «id averaging fbout 183,000,000 dollars. The principal will then have been paid off and the payment on account of interest will aggregate 6,505,965,000 dollars, making 'osrether a total payment? of 11,105,965X00 dollars in respect of the initial debt of 4,600,000,000 dollars.

The first payment bv Britain under this scheme was made on June 15, the amount being 69,000,000 dollars, representing onehalf of the annual interest instalment The pavment referred to in the cablegram above comprising the remaining half of the interest instalment for Che year and 23,000,000 dollars, the annual instalment due on account of principal.

BRITAIN ONLY PAYING.

BEARING EUROPE'S BURDEN

Australian and N.Z. Cable Association. (Reed. 6.30 p.m.'* LONDON, Dec. 15.

The Daily Express, commenting on Britain's payment of 92,000,000 dollars to the United States, says that no one suggests that Britain should not pay what she owes. The mistake was a separate precipitate arrangement with the United States instead of a general arrangement covering debits due from the Allies to Britain, who is still carrying the burden of Europe.