New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-19
Wilson Insisted
Britain w t1st
Z ay W ar Debt
Opposed Suggestion From
Lloyd George TO Cancel IL:
Letter of Ocl., 1920, Read
Into Congressional Record
ExplaineolC ountry' sStand
Borah Cr;,icizes Payment by
Government 20 England
of $32, 100000 Claims

written by former President Wilson to
Premier Lloyd George of Great Britain
October go posing the cancella-
tion of the British debt or of the Allied
debt, was put into the Congressional
Record to-day by Senator Lodge, chair
man of the Foreign Relations Com
mittee.
Senator Lodge also put into the
Record letter from former Secretary
of the Treasury Houston to Austen
Chamberlain, Chancellor Of the British
EXchequer, opposing the cancellation of
the ntergovcrnmental war debts,
Secretary of the Treasury Mellon
appeared before the Finance Commit
tee further to explain the Penrose bill
to give the Secretary Of the Treasury
comprehensive power III thu refunding
and conversion of foreign obligations.
He opposed the reference of the agree
ments made with respect to refunding
to Congress or the Senate for ratifca-
ton.
Protests Paying British Claims
ne uSCdl pOIlcN Vi INC SuNtIiliIelit
toward foreign nations came in for dis
cussion on the Senate floor. Senator
Borah criticized the action Of the gov
eminent in paying Great Britain more
than $32,000,0 900 recently in settlement
of claims when Great B:.tain owes vast
sums to the United s. tes
The letter Of Mr.. Wilson was sub
mitted to the Senate Foreign Relations
Committee at the last session Of Con-
gress by Mr.. Houston, then Secretary
of the Treasury The letter of Secre~
tary Houston to Austen Chamberlain
was also submitted last session to that
committee and to the Senate Judiciary
! Committee.
In the letter to Lloyd George Pres
| idcnt Wilson said:
at is desirable that our position
be clearly understood in order to avoid
any further delay in the constructive
settlement of reparations which arise
from the hope that the debts of this
government can form part of such
settlement. The Secretary Of the Treas
ury is authorized by United States law
to arrange for the conversion of the
demand obligations Of the British gov
eminent into its obligations having a
fixed date of maturity, in accordance
with the agreement of the British gov
eminent to make such exchange on de-
mand contained in it's existing obllga-
tions. No power has been given by
| Congress TO any enc to exchange, remit
or cancel any part of the Indebtedness
of the Allied governments to the Unit
ed State. 1t is highly improbable
that either the Congress or popular
opinion in this country will ever per-
nit a cancellation OF any part of the
debt of the Allied governments as an
inducement toward practical settle
ment of the Preparations claim.
Wilson Outlines U. S. Attitude
"You will recall that suggestions
looking to the cancellation or exchange
of the Indebtedness of Great Britain
to the United States were made to me
when | was in Paris. Like suggestions
were again made by the Chancellor of
the Exchequer in the early part of the
present year. The United States, by
its duly authorized repres entatives, has
promptly and clearly stated its UNI
willingness to accept such suggestions
each time they have been made, and has
pointed out in detail the considerations
which caused its decisions. The view
Of the United States has not changed,
and it is not proposed to consent to
the remission of any part OF the debt
of Great Britain to The United States.
Any arrangements the British govern
ment may make with regard to the
debt owed to it by France or by the
ether Allied governments should be
made in the light of the position now
and heretofore taken by the United
States, and the United States in max
ing any arrangements with other Allied
governments regarding their indebted
ness to the United States (and none
are now contemplated beyond the fund
ing of Indebtedness and the postpone
ment of payment of interest) will do
so with the confident expectation of
owed the United States by Great Brit
ain. 1t is felt that the funding of
these demand obligations of the Brit
ish government will do more to
strengthen the friendly relations be-
tween America and Britain than would
any other course of dealing with the
same.
The United States entirely agrees
with the British government that the
ton is cardinal necessity for the re-
newal of the economic life of Europe
and would prove most helpful in the
interests OF peace throughout the
world; however, it (the United States)
fails to perceive the logic in sug-
gestion in effect that the United States
shall pay part of Germany's PREPARATION,
! or that 1t shall make gratulty to the
Allied governments to induce chem to
fix such obligation at the amount with
in Germany's capacity to pay.
Fears Dangerous Misunderstanding
"This government has endeavored
heretofore in a most friendly spirit to
make it clear that it cannot consent to
linking the reparat;ons question with
that OF intergo indebted
ness. The long delay which has occurred
in the funding of the demand obliga-
tions is already embarrassing the
Treasury, which will find itself com
PEELED to begin to collect back and cur
rent interest if speedy progress is not
made with the funding. Unless ar
engagements are completed for funding
such loans and in that connection for
the lettering of interest, in the pres
ent state of opinion here, there is like
~ to develop a dangerous misunder-
standing. | believe it to be highly i'm
portant that a British representative
with proper authority proceed to Wash
ington without delay to arrange to
carry out the obligation of the British
government to convert its demand obl-
gations held by CUR Treasury into long
time obligations.
"The United States government
recognizes the Importance, in the in
terests of peace and prosperity, of
securing the restoration of financial