Evening star., 1932-12-11
METHODOF PAYING
DEBTS UNCERTAIN
British and French Plans Stir
b Much Speculation on
{st Wall Street.
Special pispatch to The star

Special Dispatch to The Star.
NEW YORK, December 10.-With
little doubt remaining that Great Brit
ain will make payment of SOS, 500, 900
to this country on December is, the
method by which payment is to be
effected was the subject Of much spec
ulation today IN financial circles.
In the British note to the United
States, submitted week ago, 1t was
stated that. owing to the exchange diff
ficulties involved in the transfer, the
payment IN gold
"Such q method Of payment would
involve the sacrifice of considerable
part of the gold reserves of the Bank
of England, which are widely regarded
as no more than sufficient for the re-
sponsibilities of London as financial
center" said this document.
The physical transfer Of gold from
London to New York is now out Of the
question, as the fastest ships on the
Atlantic that could arrive here before
the due date of the payment next
Thursday left England ports Friday.
Other arrangements, therefore, are
necessary to meet the bill which the
American Government has asked Great
Britain to pay next week.
Have S9O,O00,000 Credits.
It Is understood that the London
Joint stock banks have credits aggre-
eating S90,000,000 in New York. 1t
would be possible, bankers here believe,
for the Bank of England to make use
of these temporarily to cover their pay
ment, though this eventually would
probably involve gold shipment from
England to the United States
Tho fpar oil oIpr0 hos hnar1 fbof tho
depletion of either gold or credits would
seriously undermine the position of
sterling exchange, as there would be
little reserve with which to protect 1t,
and that its further slump would in
volve another decline in commodities
from which all trading nations would
suffer. The popular opinion is that
some time In the early part of 1898 the
pound will drop as low as $500.
Another method by which payment
could be made, without the use Of gold
or an encroachment on credits already
existing in New York and believed
necessary as a reserve, is through the
sale here OF British treasury notes in
the amount of payment due from Great
Britain, of $500, 900.
Expects Note Issue.
An international banker said TODAY
that he would not be surprised If, next
Friday morning, he would be offered
subscription to a 90-day British treas
ury bill with the rate of interest of 31a
or 3% per cent, which he thought would
be most excellent investment. Such
maturity would fall due after the Roose-
velt administration came into power.
During the intervening three months it
would be possible to reach an agree
nent under which Great Britain and
the other foreign debtors might be re-
lieved Of the June payments on their
present basis.
The method by which France will
meet her December Is payment Of $20,-
600, 600 also eliminates the presentation
of physical volume of gold, but It is
believed that France has credits here
that might be used to cover her obliga-
ton. These credits, however, are much
less than they have been in some time,
for during the past so days deposits of
the French banks in the United States
are understood to have been materially
reduced.
(Copyrigft, 1897