Perth Amboy evening news., 1922-08-24
MELLON GIVES
DEBT STATUS
British Debt Has No Relation
to Other Loans, Secretary
Declares

WASHINGTON. Aug. 24.-Fund-
ing of the $4,135, 100000 war debt
owed by Great Britain to the Unite d
States was declared today by Secre-
tary OF the Treasury Mellon to have
no relation to the war loans made
by the United States and Great Brit
ain to other governments or to ques-
lions arising in connection with re-
parations payment of the former
central powers.
The treasuryS secretary made his
declaration with respect to the Brit
ish debt in formal statement is
sued, he said, on account of numer-
Gus inquiries reaching the treasury
as to the exact status of the obliga-
tions of the various European gov
ernments. 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 government but for the
other Allies, and that the United
States in making the original ar.
rangement, had insisted in sub.
stance that though the other Allies
were to use the money borrowed
1t was only on British security tina,
the United States was prepared tc
lend it.
'In answer to these inquiries"
Mr.. Mellon said, "it should be said
that the obligations of foreign gov-
ernments in question, had their
origin almost entirely in purchases
made in the United States, ana the
advances by the United States gov
ernment were for the purpose Of
IN a
chases by the Allies,
THE statement that the United
States government virtually insist
ed upon a guarantee by the British
government of amounts advanced to
the other Allies, is evidently baseo
upon a misapprehe ension. Instead of
insisting upon a guarantee or any
transaction of that nature, tie
United States government took the
position that it would make advances
TO each government to cover the
purchases made ny that governm ent
and would not require any govern
Rent to give Obligations for ad-
vances made to cover the purchases
of any other government Thus,
the advances of tao British govern
ment, evidenced by its obligations
were made to cover its own pGr-
chases."
Mr.. Mellon quoted from ii mem
orandum handed the British am
bassador by the treasury in June,
1918, setting forth that the treasury
deemed it "a cardinal principle"
that each Allied government
should give it's own obligation for
commodities purchased and from
another memorandum handed the
British ambassador in June, 1920.
which said:
'It has been at all times the view
of the United States treasury that
questions regarding the indebted
ness of the government of the Unit
ed Kingdom of Great Britain and
Ireland to the United States govern
ment, and the funding of such in
debtedness have no relations either
to questions arising concerning the
war loans if the United States and
the United Kingdom to other gov
ernments, or to questions regard
ing the reparations payment of the
Central Empires of Europe
These views were expressed con-
stantly to representatives of the
British treasury during the period
when loans were being made TO
Great Britain, the memorandum
added.
From these two statements, MT.
Melons said, sit appears to be quite
clear that the respective borrowing
nations each gave then. own obliga-
ton for the money advanced by the
United States and that no guaran-
tee of the obligations of one borrow
ing nation was asked from any
other nation. This is the under
standing of the treasury as to the
status of the foreign obligations
growing out of the war and now
| held by the United States"
Some treasury officials were IN
clined to the view that inquiries as
| to the status of the British and
other foreign obligations had been
made as the 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 inseparately linked with
the international Indebtedness to
| the United States.
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