NO CONDITIONS

Taranaki Daily News, 13 December 1932, Page 7

NO CONDITIONS

UNITED STATES ATTITUDE FUNDING AGREEMENT STANDS PROMPT REPLY PROVIDED STATUS OF BRITISH . NOTE GROUNDS FOR. NEGOTIATION By Telegraph—Press Aon.—Copyright. Rec. 7.30 p.m. Washington, Dec. 11. Mr. H. L. Stimson, Secretary of State, on Sunday received the British Note stating that the December war debt instalment would be paid, and he immediately went into conference with Mr. Ogden Mills, Secretary to the Treasury. A few hours after Sir Ronald Lindsay delivered the Note Mr. Stimson handed him America’s answer, declaring the intention to pay had been noted with satisfaction but that the payment could not be accepted with conditions “extending outside the debt funding agreement.” The British Note specified that the payment would not be regarded as a resumption of payments under the existing agreement, but as “a capital payment of which account should be taken in any final settlement.” As the nature of the Note generally was what was expected Mr. Stimson’s quick response is interpreted as a move to leave the matter entirely to the British with the full understanding that their conditions were rejected and that if the payment was made it would be accepted only as coming under the existing agreement. Congressional reaction was immediate and favourable to Mr. Stimson’s policy, while the first Press reports from England indicated that they might fortify those favouring default. -Observers here admitted that it might create an impasse but, they believed the gap between the two Governments was not so wide as might appear, also that the British Note was . merely laying the groundwork for future negotiations. NO AUTHORITY TO ACCEPT. The American reply said: “The . Secretary of the Treasury has no authority to accept war debt , payments except as provided in . the funding agreement. Congress holds the final decision in respect of changes in inter-Governmental obligations, and 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 for any steps to be, taken which by causing misunderstandings would increase the difficulty that must be overcome in finding an ultimate solution. satisfactory to both riations. It is officially stated that in the Note Mr. Stimson took up the position that accepting 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 must be expected if it attempts to supplement its payments with similar conditions, which is considered exceedingly timely as the Chamber of Deputies has scheduled a debate of the payment for Monday. Mr. Stimson was considerably surprised that the Note was delivered today as it was not expected until tomorrow.

The American Note apparently wishes to clarify the legal status of the British Note arid suggests that the conditions mentioned ' should be construed as a simple declaration of Britain’s future policy which is in no way binding on the United States and which does hot injure 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 a re-examination of the whole problem,” the Note says. , Mr. Rainey, a prominent member of the Ways and Means Committee of the House of Representatives, declared that Mr. Stimson’s answer is “eminently proper.” Senator Borah said: “The Secretary of State could not reply in any other way than to say that the payment could be received only under the terms of the debt funding agreement.” During and after the conference where the . Note was . drafted Messrs. Stimson and Mills and others appeared anything but gloomy. They apparently feel that Britain has admitted she has the money to pay, and whatever conditions she sought to attach could not stand against this administration. It was noted that Britain did not request the waiving of 30,000,000 dollars principal.