Evening star., 1934-05-11
Token.Paying Nations Are
Stunned by Possibility of
Default Stigma.
BRITAIN IS EXPECTED
TO MAKE FIRST MOVE
Roosevelt Said to Have Hinted
Large Payments Would Lead
to Beneficial Changes.
BY the Associated Press.

BY the Associated Press.
President Roosevelt, because of four
little words tucked into the Johnson
act, has called for showdown in the
international game of war debts.
Word circulated through diplomatic
channels today that further token
payments on June IS would fail to
ring up no default" sign on the
Treasurys register. The doors of
Americas money markets, under the
Johnson act, are slammed shut on all
defaulting nations.
The act bars financial transactions
with any country lin default in the
payment of its obligations" and adds
the four words: "or any part thereof. '
sl75, 5,OOO,0OO Due June Is.
ENJOYS of at least five debtor ma
tions, it was learned in authoritative
quarters, have been informed by
Undersecretary Of State Phillips tina,
although this country would be de-
lighted to receive any payments they
cared to make on June Is. tokens
would be accepted merely with
thanks"
The decision means that unless
there is new deal in the debt lineup
and the President left the door open
for negotiation-13 nations must pay
a total Of $l75.000,000 due this coun-
try on June Is as coming within the
purview Of the new law.
The French and Belgian Ambassa
doris were informed of that resolution
on behalf of the President when they
called at the State Department
Wednesday. The Italian, German and
CzechoSlovakian ENJOYS were given
similar information yesterday.
Surprise at the stunning answers
they received to questions long con-
sidered routine left the diplomats
without speech for publication.
United States Officials Silent.
The White House and State Depart
ment made no announcement of the
new move. declining either to deny OF
confirm any questions relating to the
facts.
In one authoritative quarter, 1t was
asserted today that the Presidents in
depreciation has virtually forced the
hand OF European debtors with regard
to any readjustments or reviSions they
may have under consideration.
Great Britain, token payer in both
June and December, 1888, is expected
to be the first to take action.
In some usually well informed quar-
ters. the suggestion was made that the
entire story Of the envoys' State De-
partment visits is not yet told. The
President. they assert, has not fatty
rejected the token payment idea, but
has let the foreign nations know that
payments in full or in large INSTALL
ments might form the basis of debt
readjustments that would be beneficial
to all nations concerned
In addition to Great Britain, Italy
Czechoslovakia, Lithuania and Latvia
were the nations which made token
payments on the last due date, and
were assured by the President that
they were not then considered in de-
fault. In each instance, the tokens
were paid on the Presidents assur-
ance they would not be designated
as in default.
Not Defaulted Yet.
The passage of the johnson act
caused President Roosevelt to seek
an official opinion from Attorney
General Cummings. In that opinion
Cummings held that the five token
payment paying nations were not in
default "at present"
The President decided, on the basis
of that Interpretation of the act, au-
thoritative sources explained, that
he does not have any authority tc