The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1920-12-30
BRITISH TO PAY
Treasury Department Reaches
Agreement With England to
Refund Interest on Debt.
BY w. II. ATKINS.
Internn tionni News Service.


England's debt to the United
States of $4,000, 100000 will not be
paid within 20 years. The United
States Government. will defer both
the principal and the interest. and
allow England to exchange long
time obligations, with maturities
ranging from 20 years upward, in
return for the demand notes" now
held by the Treasury. The long
term obligations will be so drawn
as to include accurued interest from
year to year.
HAVE REACHED AGREEMENT.
Secretary OF the Treasury Houston
declared today the British govern
ment had agreed to the main fea-
lures of the funding arrangement.
and negotiations to that end soon
would be closed. Secretary Houston
was advised by cable that England
is sending a special financial en-
voy, and soon after his arrival in
Washington next week. further con-
ferences will agree upon final de-
tails % the funding plan.
The amount of interest which the
long -time obligations shall bear is
subject to speculation, but the in
tmation is that the bonds Will carry
rates equivalent to those of Ameri-
can bonds. Upon this point Secrc-
tary Houston was not prepared to
discuss details, saying this question
would be finally determined in the
forthcoming conferences with Brit
aims representatives.. Substantially
all of the foreign obligations owing
to the United States have borne
interest at the rate of per cent
for the last two years.
WILL REACH TEN BILLIONS.
How much deeper the debt prob
lem may become is dependent upon
Fnglands recuperative power in in
dustry and finance. and her willing
ness to meet the new obligations
entered into promptly. England's
$4,000. 100000 debt, extended over
twenty years, and accommodating in
terest at the rate of $250,000,O00 a
year, will rise to debt of more
than s1O,O00,OOO, 900 in twenty years.
With England in a turmoil of finan-
cial and industrial uncertainty, with
the spending of huge sums for heavier
armament programs, and still larger
OUTLAWS for projects that will clinch
her commercial dominance in all part 3
of the Old World. no small measure
of conjecture exists among officials rs
10 how many years will elapse before
England will even begin paying the
United States the interest on her debt.
A quarter of billion dollars in in
terest each year may accumulate, and
be added to the principal year after
year, for possibly ten or fifteen years,
before this Government begins to get
some of the gold coin which the
borrowing nation promised to pay In
settlement, according to the best offi-
Cial view today.
MUST BE TREATED FAIR.
One phase of the English debt appa-
rently is cleared up today. This is the
fact that England will not be allowed
to exchange the demand notes for
bonds bearing a higher rate of inter
est with the privilege attached OF
further exchanging them for out
standing bonds. The Treasury. it was
said officially. is opposed to such a
plan in that it would tend to set Up
a direct relation between those who
consent to receive the bonds in this
country and the British government
On the matter of interest rates ne
Treasury has determined that Eng
land must be treated in a spirit of
fairness" In the view of the Score
tary of the Treasury, the agreement
with England will to some extent re-
ueve the financial burdens in Europe,
and may help the general fiscal situa-
ton both in England and the United
States.
The funding Of interest along with
the main debt is believed by the
Treasury to be the logical way OF
handling the English debt problem.
"It would only add to the difficult
tics of the situation, and would not
be to the advantage of the United
States to require cash payment of
interest at this time"
POINTS OF AGREEMENT.
Some of the provisions to be in
corporated in the funding agreement
with England are:
THE United tSates shall have the
right to use the obligations Of the
British Government, in settlement of
war claims hereafter made against
. the United States.
The bonds shall stipulatc that
the payment Of deferred interest shall
be accelerated. whenever the currency
of the British government over the
foreign exchanges, reaches a point
approximating the gold import point.
3-If exchange reaches and remains
at not lower than the gold import
point, before the deferred interest