DEFENCE LOAN

Timaru Herald, Volume CXLV, Issue 21085, 11 July 1938, Page 8

DEFENCE LOAN

BRITISH HELP FOR TURKEY United Press Association £ier»r»« Telegraph - Copyright RUGBY, July 4. Moving the second reading in the House of Commons of the AngloTurkish Armaments Credit Agreement Bill the Chancellor of the Exchequer (Sir John Simon) said that under this agreement Britain undertook to advance by way of loan to Turkey such funds, not exceeding £6,000,000, as might be payable by Turkey under contracts co/eluded by her for the purchase in Britain of material necessary 7 for the defence of Turkey. The advances so made would bear interest at 1 per cent above the bank rate, with a minimum of 3 per cent, up to January 1, 1943, and thereafter at a rate certified by the Lords Commissioners of the Treasury to be right and appropriate for a loan of similar form, guaranteed by Britain, with a minimum interest of 3 per cent. These advances, together with accrued interest, would be repayable in equal half-yearly instalments over the period of ten years 1951-62. Turkey had an option to repay any advances at any time. Friendship on Secure Basis The material which Turkey intended to purchase if the agreement was authorised was to be purchased in Britain. The material was such that it might be supplied without in any way delaying or interfering with Britain’s own defence needs. The service department concerned in Britain was fully in agreement with the arrangements contemplated. In all cases the agreement only applied to such contracts as were concluded with the prior approval of the British Government.

From a political point of view Britain was glad to feel that the friendship which existed between Britain and Turkey rested on a secure and solid basis. Their friendship was not directed against any other country. Doth Britain and Turkey desired to be strong so as to improve and preserve the standard of living of their own people. The whole trend of Turkish policy in recent years justified from the political point of view the proposals embodied in this agreement, the conclusion of which hai been a matter of special satisfaction to the Government. It did not mean that the Government had in any way overlooked the general desire to promote to the greatest possible extent financial and economic relations with other foreign countries. Several Opposition speakers warmly welcomed the Bill, which passed the second reading without a division.