Evening star., 1933-10-05
BRITISH WAR DEBT
DISCUSSIONS OPEN
Those on Inside Believe
Agreement Will Be Reached
at Conference.
BY CONSTANTINE BROWN.

Ii WINS nv AASA ASASo VvANs
The debt negotiations with the
British delegation, headed by Sir Fred
erick Leith- Ross, began this morning at
the Treasury Department in a spirit Of
greater optimism than seems justifable
to the outside observer.
While it is admitted that eventual
settlement of the problem presents
enormous difficulties, those on the in
side are of the opinion that some agree
ment may be reached by the two gov
ernments. Whether such an agreement
will be acceptable to Congress is
different matter, but until Congress
can pass judgment on an eventual
agreement. the result of possible un-
derstanding for the settlement of the
British DEBT question may have as
result the lessening of the tension
last
Reports that the British will insist
on a 80 per cent reduction of their
debt. to conform with the 80 per cent
iCoOIt.OlA ll1Cy SCAH Hiohy liz
the payment of her reparations, is be-
ing discounted here. The British have
been clearly told that neither President
Roosevelt nor any American negotiator
would accept such compromise: fur
thermore, it would not have chance
to be approved by Congress.
Turn to Other Propositions.
Consequently, it is believed in we'll
informed quarters that the discussions
between the chief American delegate,
Undersecretary of the Treasury Ache
son, and the British representatives
will turn on other propositions, such as
the payment of the principal alone,
which amounts to s4,465 100000. This
might be acceptable to the British gov
eminent.
With the political questions out of
the way, the delegates will be able to
discuss the financial problem in a
clearer atmosphere. The Treasury ex-
perts have prepared a report dealing
extensively with Britain's economic and
financial situation.
From that report. it is clear that the
position of the British treasury has
much improved during the last IL
months in fact, it has improved to such
an extent that there is talk in Brit
isn treasury quarters of a reduction Of
the income tax.
1t is natural that under these circum-
stances it will be difficult for the Brit
ish to plead absolute incapacity to pay.
Cut Must Be Accepted.
On the other hand, Undersecretary
Acheson. who has very clear analytical
mind. realizes it would be a sheer waste
of time for the American Government
to discuss with the British the payment
of the war debt on the old agreement
or by granting the British some nominal
reductions.
The Treasury is fully aware that if
some agreement is to come out OF the
present negotiations, a substantial cut
of the British debt must be accepted.
1t is around the methods of how such
a slash should be made that the discus
sions are going to take place. Whether
it will be in the form of substantial
reduction of the rate of interest or
whether it will be around a complete
cut of the interest. nobody can say at
the present moment.
The fact is. however. that both tn
American and the British delegation
are anxious to reach some sort of an
agreement, which, naturally. cannot be-
come final until Congress approves it
But it is believed important that some
sort Of an agreement should come out of
this conference. If the agreement is not
certain to meet Congress approval. it
may be held over for a period of
months or even years. The Franco
American debt funding agreement
waited three years before it was ratified.
Will Avoid Defaulting.
The advantage of an agreement ac-
ceptable to the administration will be
that it will enable the British govern
ment to continue making token pay
ments for period of years. payments
which will be considered ''on account
on the principal and thus avoid the un-
pleasant defaulting. which neither the
British nor the American Government
desire
It is because of these factors that In
official quarters the conversations at
the Treasury Department are con-
sidered less hopeless than they appear
to be to the general public.
At the conferences. Sir Leith-Ross is
being aided by T. K. Bewley, while
Achesons assistant is Frederick Livesey.
assistant economic advisor to the State
Department. The latter received the
visitors in accordance with President
Roosevelt's promise last Spring that
debtor Nations seeking reductions would
be heard.
The British debt was funded at
81 600 900 900 to reach, with interest,
S11 .105 965 001 over 62-year period
The present unpaid principal is s4.465,-
900 900. A s1s3.OOO,0O0 payment on in
terest and principal is due in December.