The Washington times., 1921-10-06

FOR TRADE
EXPANSION
Secretary Tells House Commit
tee Commerce Is Hurt by un-
certainty Over Debts.
ny international News Service.

by international News Service.
Passage at the present session Of
Congress Of the foreign loan fund
ing bill, giving the Secretary Of the
Treasury wide authority to deal with
the problem Of, funding the foreign
loans of the United States, was
urged upon the House Ways and
Means Committee by Secretary of
the Treasury Mellon today.
"These loans should be refunded
at an early date to straighten out
the Treasury as we'll as to give them
a fixed and stable status" the Sec
retary said. There, is no thought
of accepting repayment for those
loans except in American currency
Lifting Of Austrian Debt Asked.
The committee also was told over
lures have been made to the United
States to release the lion On loans
70 Austria, made in connection with
relief work TAe United States holds
liens on Austrfan propSrty for these
loans and evertures have been made
proposing that this Government re-
lease these hens IN order to aid Aus
IGHdDlulAklOLl-
'It Is impossible now to fix dates Of
maturity In the funding or refunding
OF the loans, because most of the gov.
ernments owe other governments than
ours and there must be confederation
of these other loans in fixing natur-
ity dates for our loans" Mellon said.
Secretary Mellon explained the
necessity Of authority for the Treas
ury to exchange securities and make
substitutions IN order to meet the
complicated conditions in connecth n
with the foreign loans and the differ
ent character OF securities originally
taken. There has been no thought
Of q general substitution OF govern
rnents as debtors, only shifting of
the character OF securities" he said.
1T IL the intention Of the Treasury
to so fund these foreign debts as TO
insure regular payment OF interest on
them until maturities."
Fordney Recalls Agreements.
"Our Government postponed pay
ment of interest on these debts until
May, 1928" said Chairman Fordney.
THE rate Of interest was per cent,
and this rate was to run for three
years. After that a different rate
or rates OF interest should be agreed
on. It was later agreed that for two
years these governments were to pay
5ls per cent, then for eight years
to pay 6 per cent, and then back
to per cent"
Assistant Secretary Wadsworth said
that agreement was not carried out
and the governments are now paying
8 per cent on the foreign loans. The
interest on the loans was paid up to
9l9 and since then the interest has
oeen accommodating.
1T Is not contemplated taking in
terest on interest or compound their
interest payments" said Secretary
Mellon.
In reply to a question, Secretary
Mellon said no foreign government
had requested or suggested a cancel.
lation Of its debt.
DO we hope to collect from Rus
sia," asked Congressman Watson, Of
Pennsylvania.
That seems somewhat hopeless, !"
replied the Secretary. He said that
conditions were somewhat better in
Czecho- -Slovakia.
Mellon Defends Bill.
Secretary Mellon defended the plan
Of placing authority for making
settlements and funding the loans in
the Secretary Of the Treasury, sub
iect to the approval Of the President.
II would have no objection" he said
in answer to Congressman Frear, ito
having others associated with me,
but the foreign governments have
given authority to their financial
officers to effect these settlements
and division Of authority by this
government would compiicate the
negotiations and might delay settle
ment."
That objection applies, of course. to
the placing Of representatives of the
House and Senate on a settlement com.
mission" said Frear. Now the pend
ing bill authorizes substitution Of oSli-
cations, and under II there Ia a poss
bility Of the substitution OF German
and Austrian bonds. Is there any idea
this might be done?"
Il do not think any Secretary would
assume any such responsibility" said
the Secretary.
Frear asked the secretary the
amount of claims represented by the
international bankers. 1T has been
stated these bankers are urging delay
In payment OF Government claims in
order that their claims might be paid"