Evening star., 1934-01-23
|LUTHER'S PAYMENT.
ANSWER |SAWA|TED.
German Ambassador Silent
After RooseveIt's Demand
on Bond Interest.
Dy the Associated Press.

BY the Associated Press.
President Roosevelt today was await
ing an answer from German Ambassa-
dor Hans Luther to his demand to
know what. II anything, Germany in
| tended to do about full interest pay
ments owed Americans on billions Of
dollars Of Reich bonds they own.
At q conference with DR.. Luther,
called after the White House had re-
ceived no reply to two strongly worded
notes on the subject the President
made it clear the United States ex-
pected Germany to give American
creditors the same treatment accorded
creditors Of any other nation.
DR.. Luther declined to comment upon
leaving the conference yesterday. Later
in the day. he conferred with Under
secretary Of State Phillips and again
refused to comment.
The Presidents unusual action came
after the Reichsbank had announced
reductions in interest payments on Ger
man national, municipal and industrial
bonds which would cut the net receipts
to bondholders to IS per cent of the
amounts due. Exceptions were made to
favor full interest payment to bond
holders In Switzerland and the Neither
lands.
Great Britain Protests.
The State Department in note de-
liYered by Ambassador William E. Dodd
uary 1s-protested against the reduc-
tions on the ground Germany had SUI
ficient funds to make the payments
in full, but was improperly diverting
such funds to other uses, including the
repurchasing Of German bonds In the
United States at bargain prices.
Great Britain at the same time pro-
tested the Reichsbanks action as 1t
concerned British bondholders.
Undersecretary Phillips described yes
terday's White House conference as
very friendly" and added that the
Government was keeping close contact
with Berlin.
The following statement was given out
at the White House after the con-
ference:
The President talked with the Ger
man Ambassador about payments due
to Americans by German states, mu-
inequalities and corporations, which
payments now pass by decree through
the German treasury.
THE President asked definitely that
American creditors be given the same
treatment as the creditors Of other
nations.
In addition, the President told the
Ambassador of his desire that CONNER
cial relations be stimulated as between
the United States and Germany"
Plan Embodies Script.
A conference Of Germans long-term
creditors Is to be held in Berlin Thurs
day, at which this country will be rep
resented.
The President pointed out to DR..
Luther that by granting full payments
to Dutch and Swiss bondholders. the
Reichsbank was discriminating against
American bondholders.
Under the reduced payments, long
and medium term bondholders would
receive only 80 per cent, as against
so per cent paid during the last six
months. cutting the interest on z per
6 per cent bonds to $50 per cent. The
balance Of 10 per cent would be made
in script, redeemable at half its value.
Reiterating the text OF the American
note President Roosevelt was under
stood to have protested the Reichs-
banks action as arbitrary. because the
reduced payments were put into effect
without agreement or consultation with
creditors.
In the State Departments note, Ger
many was warned that it's failure to OBJ
serve essential principles Of fair treat
ment might undermine Germany's
credit, and make it difficult to contract
any new obligations in the United
States.