The New York herald., 1921-07-15
LLOYD GEORGE NOTE
INVITED WILSON TO
help CANCEL DEBTS
Advice Asked as to Best
Method for Interallied
Action.
READY TO FUND DEBT
Unable to Prejudice Britain
Against Future Ar
rangements.
LETTER READ IN SENATE
Mellon Has Not Received Such
Suggestion; Would Not
Consider 1t.
LETTER READ IN SENATE

ietter 10 PRESIDENT wilson In August,
1920. referred to suggestions that the
interallied debts be reciprocally can
celled and asked Mr.. Wilson's advice
as to the best method by which the
whole problem could be considered and
settled by the United States Govern
ment in concert with it's associates at
the earliest possible moment that the
political situation in America makes
1t possible" The British Chancellor
OF the Excheqrer six months earlier
had cabled a British Treasury official
In the United States declaring I'VE
should welcome a general cancellation
OF intergovcrnmental war debts"
That information was given to-day
by Treasury officials who appeared be-
fore the Senate Finance Committee
considering the Administration bill to
give the Secretary of the Treasury
broad powers in refunding the allied
debts to the United States.
Senate Hears Letter.
assistant secretary of the Trea sury
Wadsworth. after questioning by Sena-
tor La Toilette (wis.). Republican. and
upon request of other committee MEM
bers. read into the committee record a
lengthy extract from Premier Lloyd
Georges letter and part Of the British
Chancellors cablegram. The latter was
addressed to r. c. Lindsay, the British
Treasury representative, and in turn
referred by him informally to r. c.
Lefi1ngwell. then Assistant Secretary of
the Treasury.
The two communications brought i'm
mediate questions from members of the
committee and statement from Secre-
tary Mellon that the cancellation sug-
gestion had not been broached to him
since he assumed office and would not be
considered II made.
Premier Lloyd George in his letter to
President Wilson. under date of August,
1920, wrote:
II come now to the other question I
wish to write to you about, and that Is
the knotty problem of interallied in
debtedness. Indeed, promised Mr..
Rathbone (the American unofficial rep
resentative on the Preparations Com
mission) long ago that ! would write to
you about it, but have had to put 1t off
for one reason and another till now.
"The British and the French Govern
ments have been discussing during the
last four months the question of giving
fxity and definiteness to Germany's
reparations obligations. The British
Government has stood steadily by the
view that II was vital that Germany's
liabilities should be fixed at a figure
which 1t was within the reasonable ca
pacity to pay. and that this figure should
be fixed without delay because the re-
construction of central Europe could not
begin nor could the Allies themselves
raise money on the strength of Ger
many's obligation to pay them repara-
tions until the liabilities were exactly
defined.
AFTER great difficulties with his own
people, NJ. Millerand found himself un-
able to accept this view, but he pointed
out that II was impossible for France to
agree to accept anything less than II
was entitled to under the treaty unless
it's debts to its allies and associates
were treated in the same way
"Thfs declaration appeared to the
British Government eminentiy fair, but
after careful consideration they came to
the conclusion that IL was impossible to
remit any part of what was owed to
them by France except as part and
parcel OF all around settlement OF inter-
allied Indebtedness.
enhancement of United states.
IT need not go into the reasons which
led to this conclusion which must be
clear to you. But the principal reason
was that the British public opinion
would never support one sided ar
ranrement at its sole expense, and II
such a one sided arrangement were
made IL could not fail to estrange and
eventually embitter the relations be-
tween tho American and British people.
with caIan1itous results to the future OF
the world.
'syou will remember that Great Britain
borrowed from the United States about
half as much as its total loans TO the
Allies and after Americas entry into
the war Il lent to the Allies almost ex-
actIy the same amount as II borrowed
from the United States. Accordingly.
the British Government has Informed
the French Government that II will
agree to any equitable arrangement for
the reduction or cancellation OF inter-
allied Indebtedness. but that such ar
rangement must be one that applies all
around.
"As you know. the representatives OF