New-York tribune., 1921-06-30
Mellon w ants
Full Authority
On nAIliedDe
Tells Senate Committee 1T
Might Be TO Americas
Advantage to Take Bonds
of Germany if Guaranteed
$617,OOO,OOO Collected
Favors Gradual Repayment
to Protect Nation Against
fluctuations in Exchange
From 1he Trisane's Washington Bureau

From The Trjbane's Washington Bsrcdu
WASHINGTON, June 29.---Secretary
Of the Treasury Mellon, appearing be-
fore the Senate Committee on Finance
to-day, in behalf of the bill introduced
by Senator Penrose, which would grant
the Secretary of the Treasury sweep
ing powers in the refunding of foreign
obligations, declared that the authority
proposed in the bill was essential to
enable him to conclude satisfactory
arrangements with the various nations,
Secretary Mellon insisted that no
suggestion had been made to this
government to accept German bonds
or other bonds in payment of the debts
of the Allied nations. He held, how
ever. that it might be to the advantage
OF the United States to take German
bonds if they were fully guaranteed,
since they might be worth more than
the bonds of some of the smaller ma
tions
The Secretary was questioned closely
by members of the committee on this
the floor of the Senate that, under the
provisions of the bill giving him au~
thority for substitution of bonds, he
intended to exchange Allied bonds for
German bonds.
Allies Pay SS13,000,00o
Setting forth details of the foreign
Europe owed the United States about
S10,000,000,oo0 in principal and S1,oo0,-
100000 in interest. Interest amounting
to S451 100000 and S162,000,000 on
account of principal had been paid, he
said. Part of the interest was paid
out of the money advanced by the
United States to the debtor nations, he
added.
The Secretary said Great Britain,
Finland and Poland are the only ma
tions which have taken up with the
United States in any way the matter of
repayment in full.
More signs of opposition to the bill
developed at the hearing, and it be.
came plain there will be difficulty pass
ing it unless it is substantially re-
stricted.
While Secretary Mellon denied there
was any suggestion for substitution of
German bonds for Allied bonds, there
will be strong objections to granting
authority for such substitution in the
form the bill provides.
One of the important facts brought
out in the hearing was that this gov
ernment does not want the Allied debts
repaid too rapidly Gradual repayment
is desired in order that the exchange
situation may not be made worse for
the United States than it is.
Secretary Mellon appeared before the
committee accompanied by corps of
experts. Efforts, to heckle him, made
by Senator Reed and one or two others
of the committee, did not get far.
The Secretary has no fixed plan for
refunding the foreign obligations, it
was brought out. He desires broad
authority to meet the contingencies
which may arise. Secretary Mellon
made this statement:
Statement by Mellon
"The request for authority to deal
with the debtor nations relating to
their obligations is necessary to the
Treasury Department. The department
is without authority TO consent to any
extension of the time for payment of
principal and interest of the debts of
a number of the debtor nations, and in
the case of those where the debts arose
from advances out of the proceeds of
Liberty Loan bonds the authority is to
"a large extent restricted. Without the
broad authority provided in the act
submitted to you it would be difficult
and in some cases impossible to pro-
ceed and procure the new securities in
a form that will protect the interests
of tke government. The reason for
asking the broad authority which will
cover any contingencies that may arise
in the negotiations is that it Is essen
tial to have the new securities in the
most substantial form so that they may
De available to this government fol
any future use. 1t is essential that the
authority be complete, so that no ques-
tion may arise in the future respecting
their legality.
sIn the case of the debtor countries
it is impossible for them to make pay
ment OF their obligations as they now
mature. 1t is impossible for some o1
them to make payment of their matur.
ing interest. To insist on payment
might be disastrous to the peoples Of
such countries, and besides there may
have to be given consideration to the
bearing on the adverse foreign ex
change rates existing at the time
against these debtor countries, ant
which may make it desirable to defer
payment of interest.
Broad Authority Required
at is of the utmost importance tha
the department shall have adequat
authority relating to these claims s,
that the negotiations may proceed anc
the adjustments and refunding be ac
complished in a sound and businesslik
manner. The problem is one which ha
grown out of the war. The authority
asked, while it may appear broad, i
no more than is actually needed. TIL
United States is a creditor nation t.
the extent of over ten billion dollars
and this great asset must be deal
with by the government, and if th,
power is granted to the Secretary o