New-York tribune., 1921-08-21
Refunding Bill
Out; Passage
Held Doubtful
Minority Report Criticizes
Sharply Proposal That
Mellon Shall Control III
Billions in Foreign Debt
Power Declared Perilous
Measure Is Expected to Pre-
cipitate Bitterest Fight
of Session in the Senate
Fro,r The Tribune's Washington Bureau

penrosc, chairman of the Senate FL
nance Committee, to-day reported the
hill giving the Secretary of the Treas
ury comprehensive powers to refund
the foreign debt. He gave notice he
would call the bill up at the earliest
opportunity.
Senator King, Of Utah, served notice
that the bill would not pass in the
near future and plainly indicated there
would be opposition and lengthy de-
bate.
Senator LaFollette, Republican, and
Senator'S Jones, of New Mexico, Sim
mons, Reed, Gerry and Walsh, of Mas
sachusetts, Democrats, filed a minority
report emphatically objecting to the
bill. The minority report declares that
such sweeping powers have ever been
demanded by or granted to any official
in time of peace" 1t contends that
under the bill Secretary Mellon would
be empowered "to permit England or
France to substitute German bonds or
Turkish bonds or the unsecured and
unguaranteed obligations of any of the
newly created Balkan states"
Passage of Measure Doubtful
The fling of the minority report is
taken as a forerunner of one of the
bitterest fights of the session over the
bill. 1t is regarded as doubtful whether
it can be passed in the present extra
session and it is looked on as probable
that it will be delayed until next
winter. Some Senator's want it delayed
until after the disarmament confer
ence.
The majority report, fled by Sena-
tor Penrose, calls attention to the
fact that under an amendment adopted
by the Finance Committee the authority
granted in the bill will expire in FIVE
years.
After giving a brief outline Of the
provisions of the bill, it says the Treas
ury holds in foreign obligations a total
Of s10.l41 ,267 1888. This includes Sc
curitles received by the Secretaries of
War and Navy on account of sales of
surplus war materials, securities held
by the United States Grain Corpora
ton, and securities received from the
American relief administration. 1n-
terest accrued and unpaid is $943534,-
271 sss. ~ '
The purpose of the bill" says the
majority report, "is to give the Secre-
tary of the Treasury, with the approval
OF the President, ample power to en-
able him, when the condition of each
debtor country shall have been def
nitely ascertained and the claims of
all parties interested shall have been
presented, to deal with the situation
k%0 -of.
will. in his judgm ent, best protect the
interests Of the United States and Sc
cure the payment of the principal and
interest Of the debts now owing to it,"
The majority report contends the
representative of the United States
should nave equally as broad powers
as the representative of any other
country"
No Canceling Power Given
| "This bill gives no authority to can
eel any part of the Indebtedness of any
foreign government, to the United
States says the majority.
Discussing the acceptance of obliga-
tons Of countries other than the
debtor country, the majority report
says that in his letter to the commit
tee, Secretary Mellon has said he does
not intend to accept obligations other
the case o. the principal debtor coun-
tries, which owe the United States in
the aggregate, without interest ac-
crued. more than SO 600 900 900, and as
to the other debtor countries, that it
IS not his intention to accept any Ger
man bonds unless it becomes necessary
or desirable TO do so in some now un-
foreseen special cases.
II Is pointed out that in the cases Of
ssne smaller or poorer countries the
Secretary of the Treasury, with the ap-
proyal Of the President. may deem it
advisable to accept obligations other
man those Of the debtor country"
The majority concurs in the opinion
ci Secretary Mellon that in the case
81 the principal debtor nations the
United States is committed to the post
ponement Of the interest for two or
snree years and the spreading over
lsubsequent years of the payment of the
postponed interest installments, and
Snterest on the postponed interest, at
fsast during the two or three year pc
100 This, the committee says, is con-
ungent on the foreign governmcn ts
carrying out with reasonable prompt
ness satisfactory refunding.
Prompt Adjustment Desirable
sys;
The Indebtedness Of the foreign
countries 10 the United States actually
.1ists' ard II is necessary that some
v',t, Wy De authorized promptly to deal
I'm .ne situation it presents. After
sesel1i confederation your committee
spproYes the proposed bill, as amended
~ shording the best and most prac-
.sao'e method Of handling the mat
lne minority report says:
Vnder this bill the Secretary Of the
;ssasury now asks that Congress con
~ upon him the power TO convert any
sns oDilgations now held into obiiga-
ssa ns o. any other form or of any rate
l.. 'neerest or dates Of maturity which
~ assmS advisable- He asks that ne
bra. a1snorized 70 exchange obligations
~. agn ned by him for OBLIGATIONS oil
~ countries than the original debt.
-, should he deem that course ad-
t'snss, ts Cnocr the authority requested
isxS Ss"oia ne empowered to permit Eng.
I'm t,san or France 10 substitute German
sssaS sus or Turkish bonds or the unsc.
ru sa,, ano unKuarantecd obligations oi
"x rs 81 ne newly created Balkan states
o,,., me Secretary Of the Treasury not
~ AXIS for authorization 10 refund
r. oemand obligations now held by the
,.Ho staten, but aIzo requests the cx.
sr~DIo'nary srr power 70 adjt1t and settle
~ aha all claims, not now rcprescntcd
ponos Or obligations, which thc
LNsted states Of America now hax n,