The Monmouth inquirer., 1923-01-25
DEADLOCK ON
BRITISH DEBT
Visitors Are Told That Congress
win Not Consent to Three
Per Cent interest.
DELAY, BUT NOT A RUPTURE
Baldwin, 1t Is Said, May Convince
British Cabinet That Our View
Is Just-Asreement Unlikely
Before End of Year.

Washington. "A fiat stand by the
United States senate against reduc-
ing the interest on the British debt to
per cent smashed the agreement
practically reached between the debt
commissions of the two countries.
Notified by Senator Smoot OF this
stand by the senate, Chairman Stan
ley Baldwin of the British commission
promptly cabled his government, and
received an immediate reply ordering
the commission home for further con
ferences.
There is no hope, as a result of this
development, that the debt negotia-
lions may now be concluded in time
for action at the present session OF
Congress, which ends March 4. AS the
President and Congress are in obvious
accord as to the desirahility of avoid
ing an extra session this spring and
summer, this means postponement OF
final settlement until the next regu-
lar session of Congress, which does
not meet until December.
With the negotiations virtually com
pleted two days ago. the British hav-
ing expressed willingness to begin
payment of interest and part of the
principal every year in fiat sum,
Senator Smoot, who, with Representa-
tive Burton, represented the two
houses of Congress on the American
commission, undertook to sound out
sentiment in his body.
An informal poll had been taken
shortly after the arrival of the Brit
ish debt commission. This was taken
on the basis of Britain paying. 31a
per cent on her debt. That poll show
ed that the House of Representatives
would agree to such a proposition II
annual payments on the principal
were paid, so that the total of the debt
would be gradually reduced and the
cry could not be made with success
that the whole move was merely in
the direction of cancellation at some
time in the future.
The poll disclosed, however, that
the Senate did not favor the reduction
of the interest rate below the rate
which the United States Government
is obliged to pay on Liberty bonds.
The argument was made that this
Government borrowed the money
which Britain now owes the United
States from its citizens, in the form
of Liberty bonds, and was now paying
Az per cent on the. great majority OF
these bonds.
The majority in the senate against
reducing the interest rate, however,
was not very large, and it was the be-
lief of the Administration that suit
able appeal from the President, cou-
pied with the chance to close up the
incident and get payments started.
would be sufficient to swing the SEN
ate into line.
Then came the instructions from
the British government to its commits
sion here to agree to no interest rate
in excess of 3 per cent. This delayed
settlement for { few days. but even
tually the Al-~rican commission yir-
tually agreed to the British PROPOSE
ton.
London Stanley Baldwin, chan
cellor of the exchequer and head of
the debt-funding commission now in
America, has been notified by Pre-
mier Bonar Law to return home as
soon as possible. Officials here are
emphatic in stating this does not
mean breaking off negotiations with
Washington, but implies merely an
adjournment.
Apparently Mr.. Baldwin has adj
vised the government to make fur
Their compromise beyond the limit set
at the cabinet council before the
Funding Commission went to Amer
lea. The chancellor has accepted the
American arguments as reasonable,
but Bonar Law considers the rate of
interest too, high. The question of
time is considered minor in impor-
lance and subject to settlement with
ont fficulfv