The New York herald., 1922-04-20
Not Available and Pledged to
Redeem Liberty Bonds,
Says Treasury.
COLLECTION FAR DISTANT
Great Britain Has Sent No Of
ficial Notice She Will Begin
Paying in October.
Special Dispatch to The NEW yoRK HERALp
New York Herald Bureau,

New York Herald Bureau,
Washington. ID. O.. April IN.
Proposals by Senators to utilize the
foreign debt 10 finance the bonus re-
ceived a prompt thumbs down" from
Treasury officials to-day. It was Of
ficially pointed out that the foreign debt
will not be available and, even more inn
portant. It could not be used for this
purpose with justice to Liberty bond
holders and TO the country.
On the heels of Senate proposals to
use the foreign debt for che bonus raid
came dispatches from abroad saying
that Great Britain Is not Yet ready even
to begin negotiations for the funding Of
her deft of more than five billion dol
lars. This was no surprise TO Treasury
Department officials. They have as yet
no formal or official word that Great
ton Of the matter until after the Genoa
conference and certain European settle
ments. Nevertheless. it is known that
press reports and other information to
this effect is accurate.
1t will be many months before the re-
funding commission can get The foreign
obligations in permanent form. Even
so. as the law now stands, the receipts
from the foreign debt must be used to
retire Liberty bonds or other obliga-
tiors of the Government
Provision on Liberty Loan Act.
Treasury officials pointed out to-day
that provision was made in the second
Liberty bond act that receipts from the
foreign loans were to go for this pur-
pose. and that Liberty bonds were sold
to millions OF Americans on this basis.
The Government in effect made a SOL
emn and valid promise to purchasers of
the bonds that they would be repaid
from any funds received from abroad
treasury financing calls for the use of
foreign moneys for this purpose. Other
use would upset the Treasury financing
program. If money from the foreign
debt is not used for this purpose then
Congress will have to provide funds for
Liberty bonds maturities and for retire
ment of Victory notes from some other
source. This would require in any event
the raising directly or indirectly OF the
bonus funds from the taxpayers Secre-
tary Mellon and his assistants are a
unit in the declaration that there is no
escape from this.
Great Britain's semi-annual interest
payment is due October 10. next The
Treasury has no certainty that it will
be paid. There is no provision in the
British budget for the payment either
this year or next year.
Funding OF Interest Arrears.
1t has been the intention OF the
Treasury. with Confessional coopera-
ton. to fund the back interest due with
the principal sum advanced the Allies
in the general refunding program. Fund
fng of the British loans is to come first.
Great Britain has not yet moved. how
ever. to send a Treasury representative
to Washington. 1t was expected that
when Ambassador Geddes was notified
that the funding commission was ready
that he would be authorized TO begin
negotiations for his Government. This
has not transpired.
Delay in the British refunding pro-
gram win mean delay in all of the
others. and II may be many months or
perhaps several years before the real
cash. put out to win the war, begins to-
return to the Treasury in any consid-
cradle sum.
Treasury officials are of the opinion
tina. delay in collection Is not important
SO far as the bonus is concerned be-
cause the funds must be used to retire
Government obligations or interest pay
ments. II they are not used this way
taxes must be increased.