Evening star., 1934-05-08
FINNISH INTEREST
ON DEBT SLASHED
.03 Per Cent Rate Up to
Roosevelt light Flares
Again in Senate.
By the Associated Press.

BY the Associated Press.
A new Finnish debt agreement
slaShing its present high interest rate
almost to the zero point, awaited
President Roosevelt's approval today
The draft, If satisfactory to the
President, would give Americas only
pald-up- date debtor an interest
rate of .03 per cent, as compared to
the present 3.5 per cent.
Although Finland'S remaining debt
is comparative trifie-S8,726, ,645-
this definite and official suggestion
assumed considerable Importance
when dropped into +he muddled situa-
ton involving debts running to a
total of more than IL billion
President Roosevelt intends to send
debts, at least part of which will deal
with the Finnish obligations. Off
ciaS said the more favorable terms
to be offered Finland could not be
considered any standard formula for
solution of the entire tangle There
were no denials, however, that the
agreement would be held up as an
example to other powers.
If finally approved, Finland's in
terest rate would drop from the
highest to the lowest. Great Britain
also shares 3.5 per cent rate The
scale runs down to present 10 rate
by France and an .04 figure for Italy
johnson Attacks Tokens.
The war debt situation fiared into
high relief yesterday with an asser-
ton by Senator johnson, Republican,
of California, author of the act BAN
faulters, that further token payments
would not be accepted ON the next
judgment day-June Is
Johnson, angered at Attorney Gen.
eral Cummings ruling that token
payees were not defaulters and thus
were outside the scope of the John
son bill, hit particularly at Great
Britain in his Senate speech. He as
serted it was absurd to accept a
smaller than agreed upon payment
from a nation that boaSted a surplus
in its treasury.
Senators expected today the voice
of Senator Borah of Idaho would join
in the war debts argument before
nightfall.
While debtor nations and admins
tration officials considered the ifs
and and's of tokens, Alexander Troy
anovsky. the Soviet Ambassador
made a prompt appearance at the
State Department to protest the At
torney Generals designation of Rus
sia as a ''defaulter."
Position Not Explained.
He told reporters he had objected
but said he could not make public
the official Soviet position "at pres
ent."
Although negotiations are in prog
Tess on the Russian case, the entire
simmering war debt situation will be
brought to boiling temperature on OF
before June Is, when 13 nations have
payments due of approximately
SITS 100000.
One of the Soviet contentious is that
since debt funding negotiations are
now in progress in Moscow between
Ambassador Bullitt and the Soviet
foreign office, they should not be
classified as having refused to pay
until an agreement on the debts had
been reached.
In his Senate speech johnson said
history was replete with precedents
of nations being denied credit because
of past defaults.
Many years ago Mexico defaulted
to British bondholders," hex said
They took the matter in hand so that
on every bourse in Europe, Mexico was
denied the right to sell its securities. y
Lewis Joins Attack.
Senator Lewis, Democrat of Illinois,
joined in criticism of the foreign
debtors and expressed the hope that
mo loan will be permitted to go to
any country in debt to the United
States which expresses an unwilling
ness to pay"
Meanwhile the State Department
issued warning against the purchase
of old Russian imperial bonds with
the hope of collecting, in part or in
full, on them at the conclusion of a
debt-funding agreement between So
Wet Russia and the United States
Three issues of imperial Russian
bonds totaling S86,000,00O were sold
by New York banking firms before
the United States entered the war and
have long since been defaulted. Re-
ports have come to the State Depart
ment recently, spokesmen said. that
statesmen were selling the bonds with
the argument that they could be
turned in when debt-fltnding agree
ment has been reached at nice profits.