Evening star., 1932-11-24
bRTA|N35ALL0WE|Dg
TO PAY IN POUNDS.
Concession Granted to Pro-
tect Currency, but Gold
Is Guaranteed.
BY DAVID LAWRENCE.

Great Britain may pay her 100000
600 on December Is in sterling. This
is the extent Of the concessions granted
to Europe after President Hoover and
President elect Roosevelt. as well as the
Republican and Democratic members OF
Congress, had conferred over way out
of the debt problem.
The British, however, Will be onIged
to guarantee that the 100000 600 Will
be worth SOS, 100000, when the Amer
lean Government decides to make the
necessary transfers. To put 1t another
way, the British at the present rate
of exchange, namely, with the pound
selling at the lowest point In many
years, would have to supply about ESQ.,
OOO, 900 of sterling to meet the $685.
600 600 gold payment.
From the British viewpoint ESQ ,OOO,-
900 Is a so per cent increase over the
payment that is due, and this means
also that, with the scarcity OF gold, diffi-
culties. in getting the necessary ex-
change are encountered.
VIII Supply Difference.
The United States Government has
no desire to embarrass the British gov
ernment at this time. So President
Hoover believes the American Govern
Ul6IU WOulQ De WllIllS W deNGPb POoAANo
sterling for payment, provided the Lon
don government guarantees that it will
at the first opportunity either furnish
the necessary pounds to make up the
difference in exchange or else accept
the present payment of f20,00oo00 in
exchange for $95,000,000 in gold at
some later date.
The whole transaction presents an
unusual problem for the American
Government because, II the 100000
900 are converted Immediately into
gold In the exchange market, they
would bring $65 100000, but such a
selling movement undoubtedly would
tend to depress further the price Of the
pound. Under the circumstances, the
Treasury here probably would hold the
f2o 100000 for some favorable
time at which the exchange could be
made and then the British government
would make up the differential.
This is not a new concession. 1t has
worked the other way around. Thus
foreign governments are permitted to
pay their war debts to the United
States in Liberty bonds or other Gov
ernment securities. They could, for
instance, have purchased some of the
5 per cent bonds when they were SELL
ing In the 80's and these securities
would have been accepted at par, name
" 100 cents, if held for the December
Is payments.
Sufficient Gold Lacking.
The British do not have sufficient
gold accumulated here to pay the De-
cember Is installment and at the same
time take care of their normal needs
for gold exchange. So what the Amer
lean Government is about to do by ac-
cepting pound sterling which is guar
anteed to be worth $468 whenever the
United States ultimately demands that
they be cashed, is to adjust itself to
conditions that are unfavorable at the
moment for London, but which in the
long ruin will not prove to be any f1nan-
cial loss to America on this particular
payment.
II the United States did not make
the concession which President Hoover
has proclaimed, 1t would mean that the
British, by paying 30,000,000 pounds
instead of 20,000,o00 pounds, would be
paying a premium which. at normal
rates of exchange, would amount to ap-
proxlmately S48,600,000.
Should the pound sterling ever be
stabilized at $500, it would not affect
the present transaction, because in ac-
CCPtAiS GOyUOO,uUO pOuilNAo tOAdy 4OI Iiit
December is payment the British gov
eminent must guarantee that ultimately
the United States will get total of
s95 100000 In gold. It Is assumed here
that the willingness to accept payment
in pounds will be of material assist
ance to the British, and serve to al
leviate such irritation as may be pro-
duced. by the stubborn attitude which
Congress has adopted toward any re-
vision Of the war debts.
Both Oppose Postponement.
After the congressional leaders had
| read President Hoover's views on the
whole debt problem, it became apparent
that both the President and Mr.. Roose-
velt were agreed in their opposition to
any postponement of the December Is
payment, but that the creation of a
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