The Washington herald., 1921-07-15
Mellon Submits Plea of
Lloyd George for Can
ceIlations.
WEIGH BILL TO FUND
DEBT FROM ALLIES
Would Halt Additional
Loans Arranged Dur
ing War.

lon on what terms the administra-
tion proposes to fund the debts OF
the allied governments. before the
bill to grand funding powers to
the Treasury Is enacted.
Correspondence furnished the Sem
at. Finance Committee by Secre-
tary of the Treasury Mellon and
Assistant Secretary Of the Teasury
wadsworth yesterday disclosed that
the British government refused last
fall to continue negotiations with
the United States government Tor
the refunding of its debt on the
ground that 1t might interfere with
a general agreement among all the
allied nations for the handling of
war debts. In such an agreement
the British government would have
welcomed a general cancellation oil
interallied debts
The documents furnished the COM
mittee included a letter written by
Premier Lloyd George to President
Wilson on August 5, 1920. and a ca
bleRram from the chancellor Of the
British exchequer to b. c. Lindsey.
representative of the British treas
ury in the United States, which was
given by him to former Assistant
Secretary of the Treasury Lefnng-
we'll The latter document was dat
ed February 9, 1890, and was in
part as follows:
Suggests Clean Slate.
Turning 10 the more general con-
siderations. il is evident that hnan-
endaE-er the incipient recovery OF
Continental Europe. 1t Is impos-
sibIe to foresee the consequences
With the continent a prey to bank
ruptcy ana anarchy and the United
states unable to provide credits
of any sort owing to the Internal
crisis. the worlds position would be
indeed serious II / may venture
on what / fear is controversial
ground. may say that 1t is largely
because of these dangers that we
should welcome a general cancel
lation of interallied governmental
war debts
"The existence of these interna-
fionaI debts deters neutrals from
giving assistance, checks private
credits and will. I fear, prove a dis
turbing factor in future information
al relations"
In the Lloyd George letter it was
stated that the British government
had refused to cancel debts or the
French government on the ground
that il was impossible except as
part of a general settlement of
intsxaIlied indebtedness including
cap<<ffation Of amounts owed by
the European governments to the
United States
Wants Separate Pact.
In explaining why the British
government had refused to continue
negotiations relative to the post
ponement Of interest payment and
the funding of the British debt to
the United States, Lloyd George
stated that his government would
be glad to fall in with any scheme
which would not interfere with
a subsequent general agreement
among the nations relative to the
handling of the interallied debt.
Secretary Mellon did not state
whether there has been any change
IN the position of the British gov
ernment since last August or nCt.
He indicated, however. that the only
progress made by the Treasury in
connection with funding the Brit
ish loans since the new admins
tration came into power consisted
of one conference between himself
and the British Ambassador. At
this conference only a preliminary
discussion of the situation took
place.
Later. at the ambassadors re-
quest. Mr.. Mellon furnished various
documents bearing on the situa-
ton
Bin Under Question.
The Lloyd George letter and the
message Of the chancellor of the
British exchequer were read by AS
sistant Secretary OF the Treasury
Wadsworth as a result of inquiries
by Senator LaFollette, of wiscon-
sin. as to whether there were any
documents containing requests OF
European governments for cancel
Iation of debts owed TO the United
States. In urging the relevancy of
an inquiry along this line, Senator
I-aFollette declared that IL appeals
Of this nature have heretofore
been made by debtor nations Il Is
desirable that Congress should
know Of Il before granting the
Secretary of the Treasury unlimited
authority in the funding of allied
loans.
Secretary Mellon pointed out that
the pending bill under consideration
by the committee does not give any
authority to cancel debts and that
the present administration is op-
posed to any such action.
Senator LsFollette admitted that
the pending bill did not go so far
as to permit cancellation of debts, |
but insisted that the matter should |
be gone into.
Senator Reed of Missouri, asked
numerous questions relative to |
credits granted by the United States
to various nations. Senator Reed
declared that documents relative to |
foreign loans which he has exam |
ined disclose situation wholly un-
justified and Illegal"
Rough Sailing Ahead.
Secretary Mellon declared IL I'd he
his position that the nations which |
have not exhausted their credits
such as Greece and Liberia, are NOT
entitled TO further payments from
the United tates in view of the
conditions which were Justified