The Birmingham age-herald., 1921-07-15

government decided 1t could not deal with the question of debts owed to ! it by it's allies except as part and
 parcel of an alI-round arrangement
 of interallied debts the chancellor of the exchequer told Mir Rathbone that lie could not proceed any further with the negotiations which they had been conducting together with re- gard to the postponement of interest on the funding of Great Britain's debt to America.
 q should like to make 1t plain
 that this is due to no reluctance on
 the part of Great Britain to fund it's debt but solely to the fact that it cannot bind itself by any arrange ment which would prejudice the working of any interallied arrange
 ment which may be reached in the
 future. If some method can be found for funding the British debt which does not prejudice the larger question, the British government
 would be glad to fall in with it."
 The British chancellor of exche- quer, in his cablegram presented informally to Secretary Leffingwell by Mir. Lindsay under date of Feb r1tary 9, 1920. said in part:
 ChnnceIIor's CabIegrnm
 Turning to the more general con-
 sideration it is evident that a finan- cial crisis in America would greatly
 erdanger the incipient recovery of continental Europe. It is impossible
 to sforesee the consequences. With
 the continent prey to bankruptcy and anarchy and the United States unable to provide credits of any sort, owing to the internal crisis the worlds position would be indeed se- rious If I may venture on what l fear is controversial ground, l may
 say that it is largely because of those dangers that we should wei come a general cancellation of inter- | governmental war debts. The moral effect would even be a greater prac- tical change and fresh hope and con fidence would spring up everywhere. "The existence of these interna- tional debts deters neutrals from giving assistance, checks private credits and will, I fear, prove a dis, turblng factor in future international relations"
 Reply Not Intimated
 The treasury officials gave no tes-
 timony to show whether Mir Wilson or the treasury replied to the two
 communications and the committee adjourned until tomorrow after ask ing that treasury documents relative
 to America's loans to the allies, now in the custody of the Senate judiciary
 committee, be- obtained
 Questions involved in refunding of
 the foreign loans also came in for discussion from time to time today on the Senate floor in connection
 with debate on the soldier bonus bill. Senator Kellogg, republican, Minne-
 sota, criticised the Wilson adminis- tration for failure to bring about the refunding of the allied loans, and Senator Glass of Virginia, Secretary
 of the Treasury during portion of that administration, declared that the United States had entered inro
 negotiations with Great Britain, but that the latter had abruptly termin- ated them without explanation. Senator McKellar, democrat, Ter
 nessee, during a later brief discus
 sion of the matter, declared he would oppose grant of broad powers to the
 Secretary of the Treasury in refund ing the allied loans and Senator | Glass interrupted to declare present laws give authority to deal with the loans to the powers established prior i to the war.