Evening star., 1934-06-28
BRITISH DECLINE
PAYMENTS IN KIND
Hold Main Issue Is Amount
and Declare Plan Would
Be Complex.
BY the Associated Press.

war OcULS were QcdQlOCkeu LlRIIeI
than ever today after Great Britain
turned down a United States hint to
make payment in goods.
A British note made public last
night cited economic objections" to
payments in kind.
Britain, which was among the long
list of countries which failed to make
cash payments due June Is. put for
ward a suggestion that deliveries in
kind wouldn't prove entirely salts
factory to America. If Britain failed
to get paid for all her exports, the
note said, she couldn't buy her usual
quota Of cotton and other goods from
this country
Past Results Are Cited.
"As regards the suggested payments
in kind" the note said, his majesty's
government would recall that the ex-
perience of German reparations showed
that transfer difficulties are not solved
by system Of deliveries in kind. AS
the committee presided over by Gen.
Dawes pointed out in 1924: In their
financial effect. deliveries in kind are
not really distinguishable from cash
payments
Again stressing that the primary
question" is the amount OF money
that should be paid. the note said his
majeStys government will welcome
the opportunity Of resuming the dis
cussion whenever it may appear that
the present abnormal conditions have
so far passed away as to offer favor
able prospects for settlement"
Note Regarded as Final.
In administration circles that dec
laration was considered as making
clear that Great Britain had noti-
ned this country, in effect, that it
would make 20 payment Of any kind
until the present debt-funding agree
ment had been revised downward
Secretary Hull's note of June u,
after setting forth the American posi-
ton in opposition TO British reasons
for failing to pay on June Is, ex-
planned that Great Britain had never
made any suggestions for payment in
kind, and hinted that such payments
might open an avenue for settlement.
President Roosevelt and Hull both
made clear that the American sugges-
ton was that this country would be
glad Ito consider any suggestions for
partial payment in goods and serv-
ices
State Department officials gave no
indication whether an answer would
be made to last nights note, or if the
debt question, for the time being.
would be left in status quo.
Text Of British Note.
The text Of the British note follows:
After careful consideration of the
note which you addressed to Sir Ron
aid Lindsay on June II, his majesty's
government in the United Kingdom
feel that there are two questions to
which 1t may be useful to make fur
ther reference.
In the first place, his ma iesty's
government would observe that in
their note of June they did not
state that payment of the British
war debt was legally contingent upon
payment of the debts due to them.
What they said was that it would be
impossible for them to contemplate
a situation in which they would be
called on to honor in full their war
obligations to others while continuing
to suspend all demands for payment
of the war obligations due to them.
This was a statement not Of law, but
of fact
Secondly. as regards the suggested
payments in kind. his majesty's gov
eminent would recall that the expert
ence of German reparations showed
that transfer difficulties are not
solved by a system of deliveries in
kind.
Dawes Report Quoted.
As the committee presided over by
Gen. Dawes pointed out in 1924: In
their financial effect deliveries in kind
are not really distinguishable from
cash payments"
In fact, the economic objections to
cash payments would apply with
equal force to deliveries III kind. un-
less those deliveries were to consist
of indigenous products of the debtor
unless they were TO be accepted by
the creditor country and consumed by
1t in addition TO the goods taken from
the debtor country in the normal
course of trade.
If the United Kingdom were not
to receive payment for goods exported
on commercial accounts, her exchange
resources available to purchase cotton
and other goods from America would
be still further diminished. Therefore,
while not unwilling to give further
consideration to possibilities in this
direction, his majesty's government
does not, at the present, see any
method Of putting such a plan into
practices which would be likely to
commend itself to the Government of
the United States of America.
Amount Held Primary.
In the view of his majesty's gov
ernment, the primary question for
settlement is the amount that should
be paid, having regard to all the cir
of the debts.
They regret that up to the present
it has not been possible to make
further progress in this matter, but
they will welcome the opportunity of
resuming the discussion whenever it
may appear that the present abnor-
NAL conditions have so far passed
away as to offer favorable prospects
for a settlement. since they are al
ways anxious to remove from the
sphere Of controversy all or any mat
ters which might disturb the har-
monious relations between the two
countries.