DEBT SOLUTION

Taranaki Daily News, 3 November 1934, Page 7

DEBT SOLUTION

GERMAN AGREEMENT GUARANTEE TO PAY GIVEN EXPORTS FROM BRITAIN YOUNG AND DAWES LOANS CLEARING HOUSE AVOIDED British Wireles. Rugby, Nov. 1. The Anglo-German debts clearing agreement, the terms of which were given by Mr. Walter Runciman, President of the Board of Trade, in the House of Commons, was initialled at Berlin today. Mr. Runciman said that for some time dining the negotiations it appeared that no solution of the difficulties could be found except along the lines of a clearing agreement, in spite of the drawbacks of such a system and the hindrances which it inevitably placed upon the flow of trade.

A draft clearing agreement which, it was hoped, would avoid the major difficulties had, however, been agreed upon. The agreement was the best possible in the circumstances, but he did not suggest that if would remove all the difficulties in the way of Anglo-German trade. He advised exporters to proceed with caution.

“The basis of the proposal,” Mr. Runciman continued, “is 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. The Reichbank will provide immediately not less than £400,000 for the liquidation of outstanding commercial debts and expedite their liquidation by the realisation of outstanding German commercial claims on the United Kingdom. LIQUIDATION OF ALL DEBTS. “In so far as these measures are not sufficient, the Reichsbank will set aside an additional percentage, provisionally fixed at 10 per cent, of the value of German exports to the ’United Kingdom, sufficient to ensure the liquidation of all outstanding debts within 12 months. “Sondermarks standing in a 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 a charge upon the 55 per cent, earmarked for current trade purposes, sondermarks will be liquidated within three months. “Germany will give special consideration to exports to Germany which are particularly important to Britain, namely, coal and coke, herrings, yarns, tissues, and textile manufacturers.

“The German Government further agrees that it will continue from January 1 next to pay in full the interest on bonds of the Dawes and Young loans in beneficial ownership of British holders on June 15 last, and will offer to British holders of non-Reich loans 4 per cent, funding bonds guaranteed by the German Government, and exempt from transfer restrictions, on the understanding that the British holders who accept this offer take funding bonds in full settlement of any coupons funded.” Mr. Runciman said that the agreement reached embodied these arrangements.