Evening star., 1922-08-24
SAYS BR|T|SHDEBT
ISSEPAI|lIR!ll|T|E.LQAN 4 |! i D.
Secretary Mellon Declares
Funding Plan an Independ-
i ent Operation.
NO PART OF, PREPARATIONS
U. S. Is Not Concerned in Allied
Claims on Former Central
Powers.
NO PART OF, PREPARATIONS

Funding of the s4,135. 100000 war
debt owed by Great Britain to the
United States was declared today by
Secretary Mellon to have no rela-
ton to the war loans made by the
United States ana Great Britain to
other governments or to questions
arising in connection with repara-
tions payments Of the former central
powers.
The Treasury Secretary made his
declaration with respect to the Brit
ish debt in a formal statement Is
sued, he said, on account OF numerous
INQUIRIES reaching the Treasury as
TO the exact status of the obligations
of the various European govern
ments held by the United States with
respect to the British debt. Reports
have been published and statements
made in some quarters. Mr.. Mellon
said, that the British liability was
not incurred for the British govern,
mept. but for the other allies, ana
that the United States. In making tns
original arrangements, had lnSlsteu
in substance that though the o.ner
allies were to use the money Dor
rowed, 1t was only on. British Sc
,urity that the United States was
prepared to lend 1t.
Debt Status Defined.
"In answer to these inquiries, MIR.
Mellon said, "it should be said that
the obligations of foreign govern
ments, in question. had their origin
almost entirely in purchases made IN
the United States, and the advances
by the United States government were
for the purpose of covering payments
for these purchases by the allies.
The statement that the United
States government virtually lnslsteo
upon a guarantee by the British gov
ernment of amounts advanced to the
other allies is evidently based upon
a misapprehension. Instead OF IN
sisting upon guarantee or any
transaction OF that nature. the United
States government took the position
that it would make advances to each
government to cover the purchases
made by that government and would
not require any government to.give
obligations for advances made To
cover the purchases OF any other gov
ernment Thus the advances to ihe
British. government. evidenced ny its it
obligations, were made to cover It's
purchases, and advances were made to
the other allies to cover their rur-
chases."
Mr. Mellon quoted from memoran-
dunn handed the British ambassador
by the Treasury in June. 1918. setttns
forth that the Treasury deemed It "a
cardinal principle" that each. allied
government should give its own oo-
legations for commodities purchased
and from another memorandum hahd-
ed the British ambassador in June
1920, which said:
TT has been at all times the view
of the United States Treasury thai
questions regarding the indeotedness
of the government of the Unlteo
land to the United States government,
and the funding OF such Indebtedness
had no relation. either to questions
arising concerning the war loans OF
the United States and of the United
Kingdom to other governments or to
payments OF the central empires OF
Europe"
stantly representative OF the Brit
ish treasury during the period when
loans were being made to Great Bri-
tain the memorandum added.
Individual Loans Made.
"From these two statements" Mr..
Mellon said, cit appears to be quite
clear that the respective borrowing
nations each gave their own obliga-
tions for the money advanced by the
United States. and that no guarantee
of the obligations of one borrowing
nation was asked from any other
nation. This is tho understanding
Of the Treasury as to the status OF
the foreign obligations growing out
OF the war, now held by the United
States"
Some Treasury officials were in
clined to the view that inquiries as
10 the status of the British and other
foreign obligations had been made as
a result of the recent note of the
Earl of Balfour to the nations In debt
to Great Britain. declaring that the
inter-European debts were insepara
bly, linked with the international In
debtedness to the United States