The New York herald., 1921-07-29
VOTE T0GIVE MELLON
POWER OF REFUND|NG
FOREIGN WAR DEBTS
Senate Committee Orders
Measure Reported and Pas
sage Seems Assured.
EXPECT BITTER FIGHT
Secretary Says Government
Is Not Bound by Rath-
bone Negotiations.
PENROSE SPEEDS ACTION
Cuts Short Heckling of Secre-
tary by Opponents Of Bill
and 1t Is Put Through.
PENROSE SPEEDS ACTION
Special Despatch to THE New York HERALD.
New York Herald Bureau,
Washington, ID. C., July 28.


New York Herald Bureau,
Washington, ID. c., July 2S.
The comforting of unrestricted powers
on Secretary of the Treasury Mellon
by Congress so that he may refund
the war debts owed by foreign Govern
ments to the United States was fore
cast to-day when the Senate Finance
Committee by a vote of to 5 or
dered the measure favorably reported.
Eight Republicans and one Democrat
supported the measure and four Demo
Gratis and one Republican opposed. the
vote being:
Republicans for-Penrose( (Pa.), Wat
son Qnd.), Calder IN. Y), Smoot
(Utah), McCumber (N. d., Dilling-
ham (vt.). Curtis (Kan.) and Nc
Lean Comm. Democrat for-Will-
Jams (Miss.).
Democrats against-Simmons IN. CT,
Gerry Or. -. Walsh (Masso and
Reed (Mo). Republican against-La
Toilette (Ws.J.
The committee adopted an amend
ment by Senator Penrose which would
limit the life of the measure to nve
years but would not preclude an ex-
tension. Amendments proposed by
Senator Walsh to compel the Secre-
tary of the Treasury to submit agree
ments to Congress before their adop-
ton. and also to make the terms or
agreement known to Congress after
approval, were rejected.
To Make Bonds Attractive.
The action OF the committee was
taken after Secretary Mellon had pre-
sented in the form of a letter to Sena-
tor Penrose the information asked for
in regard to interest on the debt 10
which the Government is bound by the
former Administration. The Secretary
held that this Government was COM
mitted to postponement OF interest on
certain portions OF the loan. is not to
compound the interest and Is not bound
by the so-caIled Rathbone negotiations.
In explaining his memorandum to the
committee Mr.. Mellon said he would.
n granted the authority asked. obtain
from each debtor nation statement
embodying its offer in settlement. He
suggested that 1t might be possible TO
provide in the subsequent negotiations
for the payment OF deferred Interest
and the payment of interest upon In
terest by increasing interest rates OF
the bonds to be Issued by the debtor
country In substitution for the securi-
ties now held. This plan. the Secretary
said. met with the approval OF the
ha qa q
rate would probably facilitate the mar
keting of the bonds
80 far as concerns the principal
debtor Powers" the letter said, which
together owe us (without accrued inter-
e<t). over nine billion dollars. there Is no
intention or thought OF accepting In pay
ment bonds other than those of the
debtor country. The authority now
asked. however. covers debts owing to
us by Czecho- -Slovakia. Greece. Ru-
mania. Russia. Serbia, Poland and a
large number of other countries.
These countries also owe large
amounts to other countries. Their
resources and their ability to pay differ
widely and the conditions which will
have to be dealt with cannot now be
foreseen. The situation which confronts
the Treasury Is exceedingly complex
and to deal properly with II the Treas
ury must have ample powers
Hard Fight Expected.
Regarding acceptance of German
bonds the Secretary referred to certain
negotiations at the Paris peace confer
ence where representatives of Great
Britain, France and the United States
recommended the acceptance OF German
repa ration bonds In payment Of loans
made by the three countries to Belgium
prior to November IL. 1918. This agree
ment has been before the Senate since
February %. 1921. and no action has
been taken on It, he said. but he was
unable to decide whether subsequent me-
gotiations In fixing Germany's indemnity
and the German bonds to be taken would
make that matter for further con-
sideration.
Consideration of the bill in the Senate
is not TO be undertaken Immediately. II
was lnCicated to-day. The finance COM
rdttee wishes to take all the time II
can i'm considering the tariff bill. This
does not mean there is to be prolonged
delay. but merely that II Is to be taker
up when IL is believed It's consideration
can be completed without interruption
Efforts OF Democratic opponents to
heckle Mr.. Mellon during the open hear
ing we're cut short by Senator Penrose.
An executive session was then ordered
and the discussion continued behind
closed doors. after which II was an
nounced that the bill had been ordered
favorably reported.