Evening star., 1921-07-21


ed formally to advise the committee
on this point, but Senator Watson
republican. Indiana. forced the dis
cussion behind closed doors. at which
the decision to follow 4 less formal
course was said to have been
reached.
Dissatisfied with Negotiation.
Dissatisfaction with negotiations Of
the Wilson administration for refund
ing the allied debts prompted Secre-
tary MELONS request for blanket au-
committee today. These negotiations
were conducted by former Assistant
Secretary Ratnbone and by Mr.. Blackett
for the British treasury.
The Secretary said he did not favor
the Rathbone-Blackett plan because
IT would give us a lot of different
kinds of obligations from Great
Britain and we could not make a good
job of it," His conference with the
British ambassador. on May IL, 1891,
Department after he had conferred
with Secretary Hughes.
What did Ambassador Geddes say
about extension of time for payment"
Senator La Toilette. republican. Wis
consin. asked.
I'VE did not go far" the Secretary
replied. There were really no nego.
ttations. 1t was just a preliminary
conference and 1t was the basis for
future negotiations"
Asks II We Are Bound.
Senator Reed, democrat. Missouri,
referring to Secretary Melons letter
to the British ambassador of May IL,
1891. fled with the committee. ask ed
whether he (Mr. Mellon) desired to
that he felt bound by the arrange
ments made by the Wilson admins
tration for deferment Of interest
Il do not say whether morally we
are bound until I have examined the
documents which 1 have not done"
the Secretary replied.
Il do not see how, in the face Of
the arrangement agreed upon, of
which the foreign governments were
advised of the deferment Of interest
payments. We could at this date
change the arrangement. demand com
est payments before the date in 1922
which was agreed upon.
In refunding I would consider 1t
my duty to do that which was to the
best interest Of the government"
When asked by Senator Simmons.
democrat. North Carolina, whether he
thought Secretary Houston had ex-
ceeded his authority in postponine in
terest payments. Secretary Mellon re-
piled:
Prefers Net to Answer.
I prefer not to answer. III had
authority would not proceed upon
that plan. It is cumbersome. think
a much better arrangement can be
made for this government. Without
authority froms Congress we must
proceed upon the plans provided by
previous acts. I do not consider Il
wise to be so restricted With regard
to deferred interest and failure to re-
quire compound interest. etc. 1 do not
know what the negotiations would be
until have examined all the papers" {"
would you favor substitution Of
reparation or bonds Of other allied
nations. and would you agree to post.
ponement of interest accrued?" asked
Senator Simmons.
j These questions are important in
{ determining whether you should
! have the authority you have asked"
Il have no expectation Of accepting
German bonds.'' stated the Secretary.
so far as the question Of interest ie
concerned 1 would expect to provide
for the collection of all the interest
! that is legally due to the United
States. I do not think we can do any
thing more.
=. My idea In negotiating is to say
SO mach" explained the Secretary.
land I do not think there will be
any objection to payment Of interest
Asked Of His Authority.
do you feel that you have author
nations able to psy?" asked senator
Watson.
There may be conditions where It
would be advisable to agree to defer
tary. Il would say / would undertake
in every one of the cases to collect
every dollar of the money due the
United States. and in the matter of
interest I would insist upon pay
in those cases where 1t could be
shown that by arrangements already
made the governments claiming de:
ferment were within their rights"
The committee was forced into execu-
tive session by the motion Of Senator
Reed that Secretary Mellon be requested
to examine all documents bearing upon
allied debts. and advise the committee
States is obligated, II at all, in the mat
ter Of postponement Of payment. Sem
ator Watson objected to consideration
OF the motion in open session.
"Understanding Binding"
The understanding reached by the
Wilson administration, deferrinS inter-
est payments on loans made by the
United States to allied nations, Will be
binding upon the present administers
ton, Secretary Mellon said yesterday.
The Secretary. however. did not dis
close the policy which he will pursue
in making collections. and advised the
committee he had reached no agree
ment with any Of the debtor nations
on the subject.
The present situation. which the
Secretary called embarrassing. was
caused by discussions in 1919 between
former Assistant Secretary of the
Treasury Albert Rathbone and a Mr..
Blackett, representing Great Britain.
with the result that the understand
ing" was reduced to written memo-
randa. These conferences. the COM
mittee was informed, were held after
Secretary Glass and his successor, Da-
vid q Houston, had decided there was
authority In law for the deferment Of