Evening star., 1927-05-05
MISSTATEMENT OF REAL FACTS
CHARGED IN BRITISH MESSAGE

| The full text of the British note
with regard to war debts follows:
The attention of his majesty's gov
ernment has been drawn to the letter
| on allied war debts addressed to
| Prof. John Grier Hibben, president
of Princeton University. by Mr.. Mel
| lon, Secretary of the United States
| Treasury. which was published on
March II. So far as this letter deals
with matters of domestic controversy
his majestys government have, OF
course. no desire to offer any COM
ment upon it, But the letter also
contains certain specific references
to the position of Great Britain, ana
his majesty's government feel bound
to point out that on points of cardinal
Importance these statements do not
correspond with the facts as known
to his majeSty's government. HIS
majesty's government feel that in
Justice to themselves and in order
that public opinion in both countries
should have a fair opportunity of
Judging the position it is essential
that they should frankly bring such
points to the attention of the United
States Government.
In the first place, Mr.. Mellon
states that the United States agreed
to furnish the allies dollars with
which all their purchases in the
United States should be consummated
and what is more, we agreed to lend
them these dollars" but when the
United States purchased supplies and
services from France and the British
empire they "did not get these
francs and pounds on credit; they
paid cash" The United States ARE
oh
cause it is alleged that they were
incurred in the common cause. but
neither abroad nor in the United
States has it been suggested that If
this is to be done, the United States
are to be reimbursed the dollars actu-
ally expended by us in France and
Great Britain
Mellon Statement Discussed.
This statement implies that the
United States Government lent the
British government all the dollars re-
uuired to purchase supplies in Amer
lea and that. over and above these
loans. they paid dollars to Great
Britain for the services and supplies
they required from the British empire
and that these dollars were retained
by his majesty's government for their
the case. All the dollar payments
made by the United States for their
sterling requirements in Great Britain
which though considerable, were, OF
course, smaller in amount than the
war loans to the United Kingdom
were taken into account in fixing the
total amount of the war loans ad-
vanced to Great Britain and were ap-
piled directly to the purchase or sup
plies in America or to the repayment
of debt The arrangements made are
clearly and concisely stated in an ar
ticle published in Foreign Affairs
(April, 1920 by Mr.. Rathbone, who
was during the war Assistant Secre-
tary of the United States Treasury.
Mr.. Rathbone'S explanation was as
follows:
For it's own war purposes in Great
Britain, France and Italy, the United
States did not borrow pounds or
obliged to procure these currencies for
the use of our Army abroad. We
bought pounds, francs and lire from
the governments of Great Britain,
France and Italy, and made payment
therefor in dollars here. The dollars
thus obtained by Great Britain,
France and Italy were applied by
them toward the cost of their war
purchases here, and thus the amount
of the dollar loans required by these
countries from our Treasury was di-
minished in a corresponding sum-"
Net Requirement Covered.
1t will be seen that the United
States Government did not lend the
whole of the money required for the
British purchases in America, but
that the dollars. received from the
United States Treasury in payment of
sterling provided by Great Britain
were used to cover corresponding
part of Great Britain's dollar require
ments, and only the net dollar re-
quirements were covered by loans
from the United States Government.
This arrangement was obviously
equitable and satisfactory to both
parties, and was in fact originally
suggested by the United States Gov
ernment, in letter dated the third of
1917, from Mr.. Leffingwell,
then Assistant Secretary of the
United States Treasury, to the British
treasury representative in Washing
ton, which includes the following
paragraphs;
81 assume that your government
will use the dollar fund thus received
for meeting its dollar requirements
for purchases here and would there
fore reduce correspondingly its re.
quests for dollar advances from the
United States Treasury"
Applied to Dollar Advances.
The dollar payments to Great