New Britain herald., 1922-08-03
SENATOR'S OPPOSE
 CANCELL|NG DEBT
Washington Objects to Theory Loans Were on British Security

| Washington, Aug. 3.-Lord Bal fours note in the British note on al- | lied debt that the United States" in- SIS ed in, substance, if not in form. |" that although the Allies of Great Brit ain were to spend the money 1t was only on British security that the United States was prepared 10 lerd it, is challenged In official quarters in Washington. Formal official comment or the British note was withheld, but it was stated in thoroughly respousi- be official circles that TO such con- dit'ons were attached in connection with the credits which the United States granted to the various allied powers during the war,
 1re statement was made last night in an official quarter that all of the Amer ear loans to the other countries were direct loans. It is asserted that American loans were not made to other countries through England on British security. and that each nation to which the United States made al- vances is being held responsible for the payment of its obligations to 'h. United States. The loans " Ire in the shape Of credits, These credits were made it is explained, in such fashion that each government was enabled 10 borrow from the United States gov ernment the dollars it ne adel with Wh.ah to make wartime purchases. These advances also all took the form of demand obligations.
 he I-p}t Cfot each nation to which it advanced cash to sign written certificate of indebt- edness to the government of the United States; but these demand obli- gations were all taken by the United States treasury as temporary meas ure pending final determination as to the most appropriate form of funding the bonds into which sthey were ul- timately to be converted
 A further survey of the situationssin Washington only served more firmly ito establish the Tact, asserted in a Washington dispatch 10 the New York Times printed this morning, that the American government stands firm in its insistence upon payment of the al- lied debt to this country and is utterly opposed to any cancellatio of that debt in whole or in part In execu- tive circles 1t was emphasized that the Harding administration had no present jurisdiction in the matter of cancelling the war debts owed to the United States by any of the European powers and could not. therefore, enter into any sort of negotiations with the Brit ish government on the subject
 Law Forbids Cancelling Allied Debs.
 A high administration official mak- ing this statement added the observa- ton that congressional legislation al- ready enacted prohibited specifically the cancellation of any part of the debts in question, This prohibition Is contained in the law which recently created the American debt refunding commission, of which Secretary Mel. lon is chairman, and which expects to begin negotiations with representatives of the British government toward the end of September or the first of next October.
 With congress standing in the way of cancellation, the hands of the ad are tied There is no dis position on the part of the sdnninistra- ton to criticise the attitude of con- gress. Boh under the Wilson and | Harding administrations responsible officials of the treasury and other i'm portant departments have taken the view that it was essential to the fiscal