Bisbee daily review., 1920-12-30
BRITAIN ASKS EXTENSION IF
 BIC VAR DEBT
Exchange Of Demand Notes Into Long Time Obligations
 Will Be Considered.
HOUSTON FAVORS PLAN
Representative Of British Treasury Department Is
 On Way To America.

l
 I WASHINGTON, Dec 29.-A~ repre-
 sentative of the British treasury will
 reach this country soon. Secretary Houston said today, to continue in
 Washington the discussion of the eX-
 change into long time oblisatoins of
 the demand notes of the British gov
 ernment held by the United States. { The British debt at this time is $4,- 1 196 0OO,OO0 Under the Liberty bond act the secretary of the treasury is
 authorized to effect the exchange at
 rate of interest not less than that 1 borne by the demand instrument, Sec retart Houston said.
 The Victory Liberty loan act said 1 Houston. provides that obligations of foreign governments acquired by vir-
 tue of the provisions of the first El-
 berty bond act or through the con- i version of short thne notes acquired under that. act shall mature not later l than June 15. 1947, and that aii oj:l' ] CTS shall mature not later than Oc- tober 15 1888. I ann of the opinion i that if they so desire, the respective foreign governments should be given 1 the benefit of the full period thus i permitted The long time obligations l should, | believe. contain .a/provision for a moderate sinking fund, the first payment on which should be. made at
 reasonably early date"
 Policy Is Outlined
 1 Outlining the general policy for the
 exchange of demand obliga tions 10 long time obligations, the secretary
 said the United States should be s1v- en the right to use obligations held by it in settlement of Wal claims against the United States. Long time l bonds he said, should provide for ae- lcelerating the payl6elit of all deferred l interest whenever the currency of the ! Government in question reaches a price approximating the gold import point, and while the exchange remains
 not lower than that figure and that
 if this should happen before the de- ferred interest period has expired, no further interest should be deferred. Discussions with the British repre- sentative, secretary Houston said, will be confined to the exchange or the obligations of that government as it is the policy of this country to deal separately with each of the allied na- tions to whom loans have been made. Discussions carried on in Europe
 with the other nations iIrueDteu 70 the United States. the secretary said. have not reached stage so advanced as those with the British government. The British negotiations, he said had
 progressed to the point of general understanding, but the details remain !. N.-in l,n fa1- up with the British treasury officials here. The questions of interest rates and of the forms of the various long
 time bonds which may be adopted are yet to be decided, the secretary intimated.
 To Prepare Documents The obligations should contain suitable provision for their conversion into bonds of smaller denominations or for their payment at the option of the obligator, in lieu Of such conver- sion," Secretary Houston said. "To prevent or curtail gold exports from the United States they should contain an agreement by the uebtor govern ment to offer demand drafts payable in its currency at a figure to be fix
 ed, substantially the gold export point and to apply the proceeds to deferred
 interest and then to principal. current interest to be adjusted accordingly. Sinking fund payments should bespro- vided to be made in gold coin of the
 United States or in the currency of the debtor government at the par of exchange, if the holder shall so re- quest"
 Actual exchange of the securities twill not be made at the coming con ference here. the secretary said, add ing that the documents of the agree ment would probably be drawn up for presentation to each of the contracting governments before the transfer of the securities is made.