DEBT AGREEMENT.

Star (Christchurch), Volume LXVI, Issue 20381, 11 August 1934, Page 1

DEBT AGREEMENT.

Anglo-German Pact Signed. : NEGOTIATION'S CONCLUDED. | British Official Wireless. (Received August 11, noon. RUGBY. August 10. Following the exchange of letters ‘ appended to the recent Anglo-German ; | transfer agreement negotiations have i i been concluded in Berlin for an ex- j | change agreement between the two 1 1 countries. This agreement has been ; j signed in Berlin and comes into force 1 | on August 20. The agreement is de- i ■ signed to promote current trade trans- j actions between the two countries and j it relates to debts falling due on or ! after August 20 next. The procedure to bo f(>' , < 1 I vides that German firms holding a general exchange permit unue* . agreement, which is published as a White Paper, and United Kingdom j firms holding a general exchange per- i mit under the German exchange regu- j lations, may, insofar as the sums in foreign exchange allotted are insuffi- j cient to pay for imports, make pay- j ment in Reichsmarks into a special ! account with the Reichsbank. In re- j spect to certain goods and subject to the general limit laid down in the agreement the Treasury has requested the Bank of England to open a special account with the Reichsbank. ' For the purpose of the agreement the Reichsmarks will be sold on behalf of the creditor concerned in chronological order of their receipt into the special account. The Bank of England will 1 sell such Reichsmarks at its discretion and subject to specified provisions and will credit the beneficiaries with the sterling proceeds, less a charge of oneeighth per cent. The agreement has been drawn up on the same lines as a number of other agreements concluded between Germany and other countries. It has been made clear, as a result of the discussion on the matter in Berlin that any debt in respect of which payments made through the special account • constituted under such agreement is discharged only to the extent of the actual proceeds of the sale of Reichsmarks paid in by the debtor. Article 3 of the agreement provides that the special account mav be utilised in respect of goods prorVced or manufactured in the United Kingdom, or goods which have been p:->-cessed in the United Kingdom. Limited utilisation of the special account is j provided in respect of: (1) Goods other I than United Kingdom good' -t.. ! scribed in Article 3, if it is proved that the German buyer of tnese 0 ; purchased like goods before January 1. 1933, through a firm established in the 1 United Kingdom, in appreciable quantities and regularly, and (2) goods | produced or manufactured in any I British colony, or overseas territory, any’ territory under British protection, j or any mandated territory in respect of which a mandate is exercised by I the Government of the United King- ' dom. It will be observed that ths above j Anglo-German exchange agreement re- j lates only to debts falling due after j August 20. It has not been possible i to include provisions for the settle- j ment of existing debts, owing to | British exports to Germany, which, on ; account of the cotton and yarn ex- j

ports from Lancashire alone, are believed to amount to about £500,000. This aspect of the problem still awaits further negotiation. If, however, the new agreement results in the resumption of trade that is hoped for, the settlement of outstanding debts will obviously be facilitated.