Evening star., 1934-06-13
A New Debt Approach.

With default day" June Is, just
around the corner, the United States
has made a literally eleventh-hour
effort to salvage the war-debts sit
uation before it is permitted to sink
into the state of utter deadlock and
hopelessness.
In brief and uncommonly pointed
communication addressed to Great
Britain. Secretary Hull replies to the
note which his majesty's government
delivered at Washington on June 4,
setting forth that the British would
suspend all further debt payments
pending discussions to be initiated by
this country whenever it was thought
such interchanges would lead to val
liable results.
Secretary Hull takes issue with sew
eral of the British contentious. He
points out that, according to Attor-
ney General Cummings. Britain will
not, as she thinks, have to pay $685.
100000 here this week, including ac-
cumulated unpaid installments, in
order to avoid default unoer the
johnson act, but only s85. 5.67O, ,765 .O5,
the amount payable on June Is. 1894.
Then the Secretary of State reasserts
the American position that failure of
Britain's debtors to pay her has moth
ing to do with what she owes us, as
the British government borrowed from
us under its own name and on its
own credit standing, and repayment
was not made contingent upon the
fate of debts due to Great Britain" :"
Our attitude on this score is unas-
sailable and Secretary Hull clearly
and tersely reflects American national
opinion in reafflrming it.
The new and outstanding point now
raised by the United States is the
suggestion that it is prepared to con-
slider carefully, for eventual submis-
sion to Congress, any British proposal
looking toward payments in kind to
an extent that might be found mu-
tually practicable and agreeable"
Britain is tacitly invited to come for
ward with plans for resumption of
debt payments of this nature.
Secretary Hull does not specify
what sort of payments in kind-com-
modities instead of cash-would be
acceptable by the United States, but
raw materials like tin, rubber, jute or
other things not produced on Ameri-
can soil and of which we are neces-
Sarily large importers would natural
ly come into consideration. Even sill
yer might fall within the acceptable
category. Payments in kind would
obviate the currency exchange and
transfer difficulties on which Great
Britain has always laid such stress.
They have more than once been dis
cussed in this country in connection
with readjustment of the war debts.
Authorities have thought that the
United States might thus be enabled
TO build up a valuable store OF essen
tial materials against the emergency
of future war. Europe tried the
payments-in-kind system as a way
out of the reparations muddle, and it
was in operation until Germany in
1882 accomplished the virtual cancel
lation of her war indemnity obliga-
tions.
Complex economic questions are at
tached to any plan to substitute pay
ments in kind for contributions in
money. But the hopeful sign in this
latest debt approach is that American
craftsmanship at least is not yet
ready to throw up its hands and
brand the problem as insoluble. Sec
retary Hull projects a constructive
idea. II Great Britains debt inten-
tions are as honorable and sincere as
most Americans believe them to be,
London will not fail to grasp the
initiative which Washington has now
repassed to his majesty's government.