Evening star., 1936-05-17
WAR DEBT TO US.
BACK ON SHELF.
Britain Has All Funds Ear.
marked for Armament
and Defense.
BACKGROUND

European tCdr debts to the United
States total $13.670,0s7,3sl, OF
,Ohtct o4s,7s5,0s2 is in default.
Britain owes s4.95o.5s5.3o1. France
sl,041,f52,32S.
France ceased to pay In Deem
Der, 1882; Britain and other debt
ors, excepting Finland, phich coun-
try has met its obligations reou-
ldrly, made token payments"
until June. 1884.
Under johnson act, all loans
and credits are barred to detaultino
nations.
tcopyright. 1888. by the Associated PressD
LONDON, May l6.-Oficial Great
Britain pushed the American war debt
issue firmly back on It's shelf tonight.
Responsible sources said the ques-
ton Is Just as moribund as ever, per-
haps more so, because every extra
pound the Government can find is
earmarked for armament and future
preparedness-not for the debts of Q
long-past war
The June IS debt installment will
be defaulted as usual and Great
Britain has no intention of taking the
initiative for a renewal of payments
or for any discussion with Washington
on a scaling down or cancellation Of
the money owed.
These assurances came from every
concerned diplomatic or financial
quarter.
Admit Eden Blum Talk.
The foreign ofice did not deny
that Capt. Anthony Eden, the foreign
secretary, had talked to Leon Blum,
who probably will be Frances Leftist
premier. about debts in Paris yes
terday.
But the London concensus was that
neither France nor any other European
debtor has any more serious intention
Of resuming payments than the
British.
Blum's remarks to the American
Club in Paris. expressing hope that
the war debt "misunderstandine'
might be cleared up, were followed by
barrage OF verbal grapeshot at what
informed Londoners regarded as Q
trial debt balloon here
This balloon" took the form OF
published reports that a group OF
British politicians was urging that
negotiations be re-opened for a def
mite debt settlement with the United
States.
There is no truth whatever in the
report that the British government
is considering a new move" an au-
thoritative source told the Associated
Press.
Initiative Lies With U. S.
ANY initiative lies with the United
States"
Washington reports said that
President Roosevelt and the State
Department were silent on war debts,
but that it was believed they would
be willing to discuss proposals con-
cerning payment)
Diplomats here agreed the de-
faulters would like to see the issue
cleared up, so that they might win
release from the restrictions Of the
American johnson act.
However, no move was discernible
in that direction.
1t was felt all the powers were
more Immediately concerned with
security and defense measures and
were hopeful that, perhaps. the
johnson act would be repealed
Government circles recalled it was
the British national government
which originally permitted American
debts to fall in default and which
has made no move for three years
to pay.
Therefore, the persons said, there
is no reason TO assume there has
been change Of heart.
No Provision for Debts.
Neville Chamberlain, chancellor Of
the exchequer, moreover, cut the
budget estimate so close this year
that there was no provision for even
token payment.
believed NJ Blum was dealing only
in polite generalities when he depre-
Gated the debt cloud"
They thought he was trying to
| please the people of both America
and France without spending single
dollar.
Italy, for another, was known to be
staggering under the cost Of the Ethi-
opian war and hence was not expected
| to broach the debt issue. The smaller
countries, as rule, pattern their ac-
ton after either Great Britain or
France and have appeared to feel
there was no use to pay so long as
others were in default.
Finland Single Exception.
Finland has been the single excep-
ton to this rule.
Reports that debt settlement move
is afoot crops up semi-annually in the
city of London (the financial section)
as the due date approaches.
| One group in the city Is known to
be hopeful that war debts settlement
and stabilization can be accomplished
through joint action.
But nothing has come Of the recur-
ring rumors.
In some circles both questions have
been linked with possible Anglo
American reciprocal trade treaty Some
responsible persons have professed the
belief that the British hope to use
debt scale-down or cancellation as a
bargaining point for negotiation OF
such a treaty.
There has been no move in that
direction as yet. however
Unless Germany resumes repara-
tions payments, therefore, London to-
night saw the slimmest chances for
America to get any money from any
one but Finland.
And London thought the German
reparations issue as dead as the Rhine
lands denilitarized zone.
WILL SEEK TO COLLECT.