New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-10-13
British Legislators Unani-
nous in Approval of
Measure.
M'KENNA DEFENDS
RATE OF INTEREST
Points Out II Is Only One-Haii
of One Per Cent More than
Market Rate.

London. Oct 12.-The bill authoriz-
Ing the oO,0OO,O 900 loan which ha.
been negotiated IN the United States
rassed all its stages in the House OF
Commons to-da. The House Of Lords
will PASS IL without delay. and the bill
will receive the royal assent immediate
ly thereafter.
The bill was introduced by Reginald
NcKerna. Chancellor of the Exchequer.
Mn McKenna defended as fair and rea-
sonable the terms Of the loan arranged
bv the commission lie said the true
values Of these terms could be esti
mated only by comparing them with the
rate Of interest paid in this country.
Deducting accrued interest, he re-
marked. the British AZ per cent loan
now stands at 961s. As the American
underwriters took the loan at 90. ne ar
cued. Great Britain was merely paying
/. of per mt more than the market
rate.
To Pay British Debt.
"The loan" said Mr.. McKenna, "is
for the purpose Of paying our trade
debt and maintaining our exchange in
the United States. Our IMPORTS from
North America have largely increased
! since the beginning of the war, and our
exports have diminished. The increase
in imports for the first six months Of
1915, excluding government supplies
not included in the customs returns,
amounted TO G5S,5OOoO 1922, 500, OoO),
and the reduction in exports during the
same period was s12,OOO,OO0. thus max
ing the adverse balance f70,000,000
/ $3.50, 100000.
"Some relief for this balance against
US may be obtained by the sale in
America of securities held in this coun-
try. Every effort has been made TO OBJ
tain relief from this source, but OF
itself this will be insufficient.
1--WE should not be doing our duty,
continued Mr. McKenna, "if we neg
lected 10 take other means Of maintain
ing the normal level Of exchange. |
am sure the House will desire 10 ex-
press its thanks 10 the commission. Its
members accomplished their task with
skill and success.
"The American people are MT accus-
toned to large external loans, and be
lieve this is the first of any magnitude
in the whole history of thu United
States. We must not overlook the fact
that there are many cross-currents OF
opinion in that country.
although the transaction was purely
for the purpose OF meeting liabilities
already incurred. no little opposition
was raised by some parties whose sym
pathes were not on the side OF the
Allies. | hope the existence of these
parties will not be overlooked during
The debate. and that care will be taken
10 avoid the use of any language that
might be twisted by a hostile element
10 its advantage and 10 the detriment
Of the Allies.
The loan is trade transaction, It's
terms are fair and reasonable, and
confidently recommend its acceptance
by the House"
Mr.. McKenna added that when the
fact is considered that higher interest
is generally paid in America, the terms
of the loan are not more onerous than
could reasonably have been expected,
for when a country is at war 1t cannot
hope 10 borrow in neutral country on
as easy terms as at home.
Exposes Fallacious Argument.
He pointed out that the argument
that the freedom of the loan from the
income tax was equivalent to paying an
additional l per cent is fallacious. Put
ting the sum that Great Britain owes
the United States to-day for trade en-
fragments at $3.50, 100000, the amount
could only be paid by the export of
capital, presumably American securi-
ties.
But" he added, I'VE said TO our
American creditors, Allow us to defer
payment. upon such terms as can be
arranged They agreed, and we were
thereby enabled 10 retain f60.00O.000 OF
capital which we must otherwise have
exported, and when we retain that capt
tai we get the income tax on the dlvi-
dends from it,"
Replying to criticisms, Mr.. McKenna
said the House had received the pro-
posal more favorably than he had eX-
pected, as for the nation to pay per
cent for an Anglo-French loan at any
time was startling, but when the mem
bers remembered the circumstances he
thought they would agree that the com
mission had done extremely wei:
at has been said" he continued,
chat the Americans have obtained an
exceptionally good bargain, but they
we're offered double the bargain and
they would not take il.
Tried in Vain to Get More.
ave tried" said Mr.. McKenna. ITO
get 5000 .00o 900, then il6O,OOO,OOO, then
| Sii0 600 600, but we could not get more
| than 500, 900. The sending out OF