The Washington times., 1921-11-11

at the Peace Conference. A memo
randum prepared for President VII
son by Norman ii. Davis. then as
sistant Secretary OF the Treasury, on
February 21, 1920. says;
"As you are aware. efforts begin
ming with the peace negotiations
were made 10 bring about cancel.
lation OF our debts against the allied
governments. but the question was
not presented In such definite way
as TO require us TO take any formal
action"
In March, 1919. the report reveals
the United States Treasury Depart
ment learned" that an Italian repre-
sentative had proposed at meeting
of the financial drafting committee
named by the executive council OF ten
at. the peace conference that "reao-
portionment and consolidation Of war
debts be one of the questions con-
sidered In drafting the peace treaty.
Explanation Demanded.
Albert Rathbone, Assistant Secre-
tary of the Treasury. the official rec
ords show, Immediately took up the
matter with the Italian Embassy In
washington. He expressed great su'.
prise at the position taken by the
italian Government, and stated most
emphatically" that the United states
Treasury cannot contemplate con.
tinuance OF advances to any Allied
Government which Is lending lts SUP
port TO any plan which would create
uncertainty as to It's due repayment
of advances made to IL by the Unit I'D
States
Replying to Mr.. Rathbone. Enrico
Alliata, delegate Of the Italian Treas
ury. disayowed any intention OF italy
to "propose any resolution directed 10
the nuro~s of releasing the ltaIan
government from the financial obi.
cations taken with the United states.
But at the same time that he called
on the Italians for an explanation AS
sistant Secretary OF the treasury
kathhpne demanded OF Edouard ue
Billy, French deputy high Ccommis.
sioner In Washington, a statement OF
the reason and purpose OF the actioh
of the representative OF the French
government on the drafting committee
in strongly" supporting the Italian
proposal.
Disavowal From France.
NJ. de Billy likewise was advised
that continuing to pursue such
course would cause the United Sta'es
to cut off any further loans He re-
piled that the French authorities lid
not favor either the Italian proposai
or any other similar proposal.
Further examination OF the report
discloses that the first revival OF the
cancellation movement after the pc ace
conference effort had failed was dis
covered by BENZ r. Strong. repre-
senting the Treasury Department,
abroad. He wrote to Assistant Secre.
tary of the Treasury r. G. Lefingweii
from London July rs, 1919:
There is a feeling here that We
should try to have some cancellation
of debt all around"
1t appears then that conversations
on the subject were had between rep
res ontattves Of the American Govern
ment and British officials. Following
these conversations Basil +. Blacke-t,
of the British Treasury. In "February'
192O'-day not given--formally re-
newed the proposals for cancellation In
a letter to Assistant Secretary Rath-
bone. Explaining 1t was FOR the pur-
l,ose of formal record" Mr.. Blackett
wrote:
'It has been the view OF the Bit.
ish Government that the existence OF
as mass Of inter-governmentai IN
debt edness not only involves very
great political dangers, but also forms
at the present time a most serious Oh
stacle to the recuperatiop of the world,
and particularly of continental Europe,
from the immense strain and suffer
ing caused by the war.
Made Matter of Record.
They have more than once sugSes-
ted informally to representatives OF
the United States Treasury that steps
should be taken by the two govern
ments in concert to find some large no
luton of this problem. and, as you are
aware. the Chancellor Of the EIchequer
expressed himself ready to take any
steps toward relieving the gov 'nmsnts
which are debtors to the British Gov
ernment of the burden of their debts
which the United States Treasury
might feel able to propose In regard
to the obligations OF the governments
which II holds.
These suggestions have not yet
hitherto been placed on formal record.
IL is for the purpose OF formal record
that they are mentioned here"
Mr.. Blackett's letter also was ad-
dressed to Ambassador Wallace In
Paris and forwarded by him to the
Treasury Department here.
A few days after the formal pro.
posal by Mr.. Blackett. the British
Chancellor OF the EIchequer took up
the subject In a message sent through
the British embassy to the United
states Treasury. Secretary OF the
Treasury Houston and Norman II.
IN.,,t. Assistant SeCretary innnadi-