Evening star., 1934-04-17
SECURITIES BAN
HITS IS NATIONS
Treasury Record Indicates
Action Under Johnson
Measure.
BY the Associated Press.

BY the Associated Press.
American investment outlets may
be closed to not less than 18 foreign
debtor nations, Federal Treasury rec
ords indicate, if the accepted sense
of Senator Johnson's bill to outlaw
transactions in securities of nations
''in default in the payment of its
obligations" to the United States is
invoked to its extreme.
A careful search of Washington,
however, reveals no official willing to
define for quotation just what consti-
tutes a default" within the meaning
of the bill. The State Department
politely, but none the less firmly, de-
clines. while the Treasury diplomat
ically refers to unpaid balances due
as amounts not paid according to
contract terms"
This unusual timidity, 1t is be-
lieved, was inspired by President
Roosevelt's recent utterance in which
he stated token" payments would not
be construed by the administration as
an evidence of default. In view OF
this, official Washington believes the
President will be supreme arbiter in
the matter.
Outlines Three Glasses.
The Treasury, in response to Sen
ate resolution requesting statement
relative to Indebtedness of foreign
governments to the United States, as
of January 4, 1884, broke down into
three classifcations the debtor ma
tions which have not paid according
to contract terms.
In the first classification, which
dealt with countries which have made
payments on account of amounts due
July /, 1882, to January 4, 1884, ap-
pear the names of Czechoslovakia.
Great Britain, Greece, to be in arrears
to the extent of S195 ,596 ,228.
In the second classification, which
included countries which have made
no payments on account of amounts
due July /. 1882. to January 4, 1884,
appear the nations of Austria, Bel
GUM. Estonia, France, Germany,
Hungary, Poland and YugoSlavia
which owed, jointly $108.559, 1854.
Under the third classification,
termed "unfunded Indebtedness, ap-
pear Armenia, Nicaragua and Russia.
owing together, unpaid balances Of
1857, ,953, ,255.
Securities Would Be Barred.
Under a literal Interpretation of the
johnson measure, Washington officials
agree, none of the securities of the
above mentioned countries could be
dealt in in the United States.
The act. which provides a fine of
not more than $4,000 or imprison-
ment for not more than five years, or
both, for any infraction. follows:
BE it enacted that hereafter
it shall be unlawful within the United
States or any place subject to the
jurisdiction of the United States for
any person to purchase or sell the
bonds, securities or other obligations
of any foreign government or politi-
cal subdivision thereof. or any organi-
zation or association acting for or on
behalf Of a foreign government or po-
litical subdivision thereof, issued after
the passage Of this act, or to make
any loan to such foreign government,
political subdivision, organization or
association, except renewal or ad-
justment Of existing indebtedness
when such government, political sub
division, organization or association is
in default in the payment of its obli-
cations, or any part thereof, to the
government Of the United States
Capitol financial observers point out
that Schedule B of the securities act
of 1888 effectively prevents the fota-
tion of foreign securities in this coun-
try through the impracticability of un-
derwriters meeting its terms.
For instance, it was said, no under
writer's would care to subject himself
to the heavy penalties provided for
erroneous or misleading statements in
nor would he be able of
his own accord to have personal
knowledge Of the IA detailed Stipula-
tionS contained in Schedule B Of the
act.