New-York tribune., 1921-06-28
Mellon to Tell
Senators Plans
For Allied Debt
Will Answer Objections to
Administration Measure
When He Meets Fin
ance Board Tomorrow
Harm 10 Capital Feared
The Irreconcilables Suggest
More Entanglements With
Europe Because of Bonds
From The Tribume's Washington Bureau

From The Trtbnne's Washington Bureau
WASHINGTON, June 27.-Secretary
Melons statement before the Senate
Finance Committee Wednesday, when
he is due to appear and explain the
Penrose bill giving the Secretary Of
the Treasury broad powers in the re-
funding of foreign obligations, is
awaited with the keenest interest by
Senators.
Already opposition has shown itself
in the Senate to the bill, which Senator
Penrose introduced at the request of
the Administration. Whether this op-
position is to be intensified will de-
pend largely on the explanation given
by Mr.. Mellon.
When the bill was discussed last
week objection was raised by Senator
Mcclellan and others on the ground
that it would give the Secretary au-
thority to exchange Allied bonds for
German or Austrian bonds.
1t is generally assumed Mr.. Mellon
will advise the Finance Committee that
he has no such purpose, and that he
will be able to show the committee he
of securities which would be harmful
to the interests of the United States.
On another phase of the foreign
obligation problem Mr.. Mellon will
doubtless be questioned quite rs closely
as on his plans regarding substitution
of the securities Of one nation for
those of another. This relates to the
problem of what the United States gov
ernment intends to do with the foreign
obligations once they are refunded
Mr.. Mellon, it is anticipated, will tell
in some detail of the plans for the dis
posal of the bonds by the government
already indicated in a general way that
it was the purpose to sell the bonds to
the American people.
Two objections to the sale of these
securities to the American public are
uttered in Senate circles. They are
that in the first place their sale in
large quantities would hurt the market
for the sale of domestic industrials
and railroad securities and tie UP
capital that ought to be directed toward
the revival of business, and in the sec
ond place, that the American public
would be drawn into undue interest in
bers of Americans buy European
government bonds. Some of the irrec-
oncilable Senators to-day raised the
question whether America would not
become entangled in European affairs
more surely by the bond route than II
would have been by the League of Ma,
tions, which this government has
scrapped.
Criticisms of the Penrose bill, though
talked about the corridors and cloak
rooms of the Senate, are more or less
contingent on what Mr.. Mellon will
have to say before the Finance Com
mittee. Unless the Secretary can an.
swer satisfactorily such objections the
Penrose bill will have hard path tt
travel in the Senate and notifications
will be required.
1t is probable, as things appear now
that there will be full and frank dis.
cussion of the whole foreign obliga
tions situation as it affects this coun
try when the bill comes UP on the floor
One of the plans talked of is to pass
resolution calling on the Secretary Of
the Treasury for statement to the
Senate clearly defining just what he'in-
tends to do relative to the refundine
and ssale of the foreign obligations
His statement before the Finance Com.
mittee, however, may cause this idea to
be dropped.