Evening star., 1936-03-29
CREEK OFFER ON DEBTS
MAYBE HINTOF NEW WAR
Settlement of European Nations Obi
cations to L. S. Would Pave Way for
Further Loans, Now Banned.

agreement, therefore. was dropped.
at least temporarily.
After the expiration of the mora
torium, five governments (Czecho-
slovakia. Great Britain, Italy. Latvia
and Lithuania) made token" or par
tial payments as evidence of their
good faith, while the rest claimed
inability to pay or asked for a post
ponement Finland alone maintained
the full payment of its obligations.
These token" payments were con-
sidered by the United States Gov
ernment as relieving the debtor ma
tions making them from the position
of being defaulters. On June IA,
1888. the President issued a state
ment in which he said:
In a spirit of cooperation have
as Executive noted the representa-
tions of the British government with
respect to the payment of the June
Is installment, iiaasmuch as the pay
ment made is accompanied by a clear
acknowledgment of the debt itself.
In view of those representations and
of the payment I have no personal
hesitation in saying that do not
characterize the resultant situation
as default"
New Statement in November, 1888.
Again, on November Z, 1888, when
another installment on the debts was
about to come due. President Roose-
welt issued another statement, in
which he said:
"In view of these representations,
of the payment, and of the impossible
ity. at this time, Of passing finally and
justly upon the request for a readjust-
ment of the debt, I have no personal
hesitation in saying that ] shall not
regard the British government as in
default"
Shortly before the next installment
was due, the Congress, on April 13.
1884, passed the so-called johnson act
making it unlawful for any person in
the United States, whether an Amer
ican citizen or not, to purchase or
sell the bonds, securities or other
obligations of any foreign government
issued after the passage of this
act, or to make any loan to such
foreign government except q
renewal or adjustment of existing in
debtedness," so long as there is default
in the payment of such obligations
or any part thereof"
A few days after the passage of this
act the Secretary of State requested
from the Attorney General an opinion
upon various questions pertaining to
the act. In the course Of his reply,
dated May S, 1884, the Attorney Cen
eral called attention to the statements
of the President quoted above and
also to the fact that these statements
by the President were accepted in
good faith by Great Britain and GER
tain other countries.
Token Payments Default.
He also pointed out that Mr.. Nc
Reynolds, who had charge of the
johnson. act during its consideration
by the House Of Representatives, was
apparently of the same view as the
President, and that "the President, by
signing the bill, participated equally
with the Houses Of Congress" and his
view Of the meaning Of the words con-
tanned in the act was "of great sig
nificance." He therefore concluded
that the five countries mentioned
above were not at that time Gin
default under the terms of the act"
The clear implication of this opin-
ion, although not stated in so many
words, is that governments making
token" payments thereafter would
be considered in default. This impli-
cation is borne out by ruling of the
Department of State, on May 10, 1884
that any token" payments in the
future would constitute default. Ac-
cordingly Great Britain, on June 4,
1884, although prepared to continue
token payments "on the assumption
that they would again have received
the Presidents declaration that he
would not consider them in default"
CONTINUED on Third Page.D