BRITAIN'S WAR DEBT DEFAULT
Reasons Explained By Mr. Chamberlain
HONG KONG DAILY PRESS, THURSDAY, JUNE 7.
1934
WORLD AIR CONTEST
DEBT DEFAULT | HUNGARIA AND
Acclaimed By France
(Special to the "Hong Kong Daily "Press" (Copyright).]
Paris, Jund 5. Great Britain's refusal to make the United States even a symbolts course attended by such disastrous cal payment by instalment of the London, June 5
War Debts due on June 5 is ac- The Chancellor of the Exche consequences.
claimed with sailsfaction by the Neville Chamberlain. quer, Mr.
whole French Press slace from now onwards France is not the only great Power in desult. 50 that France's former attitude seems now to have became reguls rised by the action of Britain.
"Accordingly," said Mr. Cham- addressed to to-day, issued his promised state-berlain, they have ment on war debts, which was followed by the issue of a White Paper containing the recent cor- respondence on the subject be- tween the British and the United States Goverment
Mr. Chamberlain recalled that the British Government, in a note of December 1, 1932, gave a full statement of the reasons which, convinced them that the system of inter-Governmental war debt obligations as it existed before the Hoover Moratorium could not be revived, and that a rádical revision of the existing settlements was essential.
The United States Government. in their note of December 7. 1982. for a welcomed the suggestion close examination of the whole subject between the two countries. The British Government pald the Instalment due on December 15, 1932, in gold, explaining that this payment was not to be re- garded as the resumption of an- nual payments under the existing agreement, and that it was made because the United States Govern- ment had stated that, in their opinion, Buch payment would greatly increase the prospect of a satisfactory approach to the whole
problem.
the United States Government a note in which, after briefly re- stating their views on the whole
the war question of
debt, they state that while deeply regretting the circumstance which have im Many papers express the hope posed upon them the necessity for
that the United Stares will nowW be disposed to enter into negotia such a decision, they have can- cluded that they must suspendtions about the new regulation of the War debts but in view of the further payments until it become- discuss an ultimate
obstacles placed in the way by possible" to
Congress, the possibility of Pre settlement of inter-Governmental war debts with a reasonable pros-
sident Roosevelt being able to pect of agreement.
pursue, this policy in the near fu ture is doubtful-Transocean Kto Min.
No Repudiation of Obligations "The British Government," he continued. "have again made it clear that they have no intention of repudiating their obligations and will be prepared to enter upon further discussion on the subject at any time when, in the opinion. United of the of the "President States, such discussions would be likely to produce results of value."
The British note, which contains several striking passages, states that nothing has since occurred to cause the British Government to change its views expressed in their note of December 1, 1933, when reasons were given for their be- Hef that the existing system of in- tez-Governmentali war debt obliga tions had broken down.
The present settlement, it is ar- a burden on the gued, imposes British people which is unreason-
Discussions took place both in the Spring and Autumn of 1ast year, but it was not found possible to arrive at a settlement acceptable in itself and inequitable in able to the two countries.
'Token Payments,
relation to the treatment, accord- ed to other countries.
In respect of war advances to- On June 15 and December 15, 1933, the British Government made talling US.84,277.000.000 payments totalling U.S.$2.025,000,000 have token payments in acknowledge-been made to date by the British ment of their debt, and on each of the occasion the President United States expressed a person-
Government to the United States Government. Yet the nominal amount of the debt still outstand-
al view that he would not regarding amounts to U.S.84,713,785.000. the British Government as in de- fault. 4
Mr Chamberlain continued:- "The British Government would have been prepared to make a fur- ther payment on June 15 in ac- debt and knowledgement of the
without prejudice to their right again to present the case for its the assumption readjustment on that they would again have re- ceived the President's declaration that he would not cbnsider them in default.
CHINESE AIR MISSION
Visit to Breda Works
Milan, April 11. A Chinese Mission paid an ex- tensive visit to the Breds Works yesterday. The Mission consisted of Messrs. General
ru Ling-y. Director of Military Publications; Teng Chiek. Secretary of the Chinese Youth organization; Co- lonel Cheng Ching-ming of the General Staff: Li Kwo, Chief of the Nanking Police; Cheng Yung- the Military Academy, ming of and Professor Wu Tang, B.A.. J.D.
A special demonstration Breda aircraft was staged on the Company's aerodrome, after the Mission had been shown through the several Factories.
of
The demonstration consisted of flights by the "Breda 15" "Breda 25" planes, the 39" and "Breda latter being put through a set of While Britain borrowed" US. remarkable
by Cav. aerobatics
of the $4,277,000,000 from the United | Monti, Chief Instructor States. they themselves made war Breda Avtation School. advances to allled Powers totalling
£1,600,000,000,
how
much
Britain's Heavy Burden. She has paid over to the United States all the amounts recovered If the United from war debts. States feel the burden of their war advance of U.S.$10,050,000,000, against which they have received U.S.$2,703,000,000,.. that in heavier is the burden of the "But they understand consequence of the recent legisla United Kingdom, which, with one- tion passed in the United States, third of America's population, "has is no had to meet the full charges of its that such a declaration "longer possible, so that the pro-war advances of US.$7.800,000,000
cedure adopted by common agree meni in 1933 cannot be followed on the resent occasion.
"In het, our Ambassador was informed by the United States Ad- ministration on May 11, that any Government failing to pay in full the instalment due under the ex-
without any net receipts against the charges, and has, in addition, made large payments out of its .own resources in war debts to
America.
The note pointed eut that the suspended British Government their claims on debtors in the hope isting agreement on June 14 would of a general decision, but cannot have to be regarded as in de- contemplate a step in which they obligations to fault, and on May 25, the Treasury would meet their
others while continuing to sus- of the United States, addressed a
to" the Britishpend payments due to them. communication
As to Britain's improved budgetary Government setting out the de- tails of the various items, includ-situation, which is due to unpre- ing arrears of U.S.$196,000,000 due cedented sacrifices made by the last year. and amounting alto- British nation since the war, they gether to a sum of U.S.$282,000,000 have been carrying a burden of or over £50,000,000 due on June 28,000,000,000 ($840,000,000,000) or £170.($850) per head of popula- tion, about one-fifth of which re- presents war loans made to the Allied Governments.
15."
Two Alternatives."
His Majesty's 'Government were therefore, in these circumstances, faced with the alternative: either!
of paying this suin of £50,000,000
YUGOSLAVIA
Frontier Dispute
[Special to the "Hong Kong Daily Press" (Copyright;)]"
Stunt Flyers Competing
(Special to the "Hong Kong Daily' Press" (Copyright)}
'Paris, June 5.
SINKING OF NANTUCKET
LIGHTSHIP
Board Of Trade Awaiting American Enquiry Result
London June 8.
The Board of Trade awalt' the
championship result of the American enquiry STORMY
before deciding whether to hold a public enquiry into the sinking of the Nantucket lightship by the White Star liner Olympic.
Geneva, June 5. The League of Nations Council at Tuesday's public session consider- Hungarian-Yugoslavian ed the
Another world frontier dispute." The Hungarian
will be hotly contested at Vincen- delegate asserted that acts of nes on June 9 and 10 when on the violence, against Hungarian nat-invitation of the "Air Propaganda tonals had been perpetrated for Society' for the promotion. of years past, thirty one persons. French aviation sport, ten, cele- It is reported that preliminary having fallen. victims, and pro-
brated stunt airmen will try to private investigations are already posed the appointment of a mixed
qutdo ane another in aerial acro-proceeding but this is usually the Hungarian and Yugoslav Commis baties.
case in all sea disasters. sion to examine the incidents and episodes.
The Yugoslavian Delegate said his Government desired amic- able settlement... Thereupon the President of the League of Nations Council recommended both par- ties to try to settle the disputes by direct negotiations-Transocean Kuo Min.
SILVER MARKET
(From Our Own Correspondent)
London, June 8. London silver prices to-day were up for spot and up 3/16 for for- ward as follows:-
June 5. June 6. .19.11/16 18.13/16
19.11/16 197 The London on New York cross- rate at 2.00 pm to-day wLS' $.C5- compared with 5.03-1 at yesterday's closing:
"Spot
Forward
Germany will be represented by Gerhard Tesler and Gerd Achge- lis. The honour of French avia- tion will be defended by Michel Detroyat, prize winner in the con- tests at Rennes, and the novice, Cavalli England Sends Clarkson, italy sends Colombo and Venci. and Portugal and Czechoslovakis will also take part.
....
The additional attraction of this Interesting event will be the pre- sence of the Italian national air squadron, stunt airmen who have received special permission from Mussolini to leave Brussels on Friday to proceed to Faris-Trans ocean Kuo Min
ONE CONVICT STILL AT LARGE
New York, June 6. Eleven out of the 12 convicts who made a daring break from the Parchman. Penitentiary, Mis- souri, on Monday, have been re- captured-Reuter..
NATIONAL CITY BANK
OF NEW YORK
Board Chairman's Letter
To Shareholders
Shanghai, June 6.
The following is the full-text of a letter malled on June 4, 1934, to the 'Shareholders of the National City Bank of New York by the Chairman of the Board, Mr. James H. Ferkins:-
"To Shareholders:
directly or in any other way women might be taken by the public to indicate the relationship with
|
If the verdict of the United States Court appears to be con- clusive and reasonable it is be- leved there will be no necessity for holding a formal enquiry- Reuter...
#
CLAIM AGAINST OLYMPIC
New York, June 6. The United States Government is claiming US. 8500,000 against the White Star liner Olympic in connection with the sinking of the Nantucket lightship, recently. The eleven counts in the claim include allegations of fallure to keep a proper look-out," excessive. and dangerous speed in a fog and failure to take proper steps when the danger of the collision was apparent.
The claim demands that the Olympic, which is due in New York to-day, should be "condenin- ed to be sold to pay the damages sought.":
No claim is made on account of the members of the crew of the Nantucket lightship who perished. -Reuter.
BOND DEPOSITED
London, June 8. The White Star Line has de-" posited a V.B. $500,000 bond with Government, the United States thus preventing the liner Olymple from being able to arrest in New York-Reuter.
ARMS
SESSION
Mr. Henderson's Threat
(Special to the "Hong Kong Vails
11
Presa" (Copyright,}]
Geneva, June 5. Stormy proceedings marked the course of the presidential session of the Arms Conference that end- ed on Tuesday at 7 o'clock. Sharp altercation occurred between Mr. Arthur Henderson, the president, and M. Barthou. the French foreign minister.
reached the. climax when Mr.
Henderson threatened to resign.
which
The session of the main.com- mittee convened for Wednesday has
been postponed indefinitely, and the presidential session will
resume discussions instead.--Trans- ocean Kuo Min.
KING OF SIAM ENTERS NURSING HOME
London, June 5. His Majesty the King of Siam, who is on a visit to London, en-,
tered a nursing home yesterday to undergo an operation for cataract. -Reuter.
the affected States, "a programme providing for the expenditure of U.S.$525,000,000 which involves legislation to be enacted before the end of this session of Congress
A sum of U.S.$100,000,000 will be
DROUGHT AREAS provided for the purchase of ad-
RELIEF
Large Sums Voted
ditional beef and dairy cattle to make good the farmer's losses.
Another US. $100,000,000 will be ear-marked for the processing of cattle and other products.
A third sum of. US$100,000,000. will be spent on emergency works,, while a fourth U.S.$100,000,000 wil be allotted for the furnishing of ivestock.
Washington, June 5. any investment banking
Despite the glad tidings of fresh house. I think the Bank should rains over a wide area, the authari-
Very heavy rains, averaging half keep. Itself free to do "legitimate ties in the Middle-West States are
an inch, fell in sections of Min business with елу responsible continuing their plans for vast re-nesota and North Dakota, yester- house on equal terms with any lief in the drought areas:
day. Reuter. other.
President Roosevelt Has out "The City Company will accord-ined to over 50 Congressmen from ingly discontinue the securities apusiness immediately and will pro- ceed to wind up its affairs. This will take time as it will be neces- sary to liquidate slow assets and dispose of pending claims.
""The Banking Act of 1933 passed last June required the divorce- ment of commercial banking from
investment
The feature of the demonstra- tion, however; was the exhibition flight made on the Company's la test pursuit plane, the "Breda 27" by Ing. Colombo. War-time ace and Head Pilot of the Breda Air-
Works. The craft
"Breda 27." which is capable of a top speed of over 390 kilometers per hour (245 mph) and is equipped with two half-inch machine guns, was demonstrated in a display of mas- teriy aerobatics which emphasized
banking within the plane's astonishing manage period of one year. I felt that the ability and supple responsiveness National City Bank of New York to the controls. During the dis- should support the policy of Con- play, the plane carried its full gress in both. the letter and the military equipment."
spirit. In the year which has fying qualities pt the passed we have been endeavour "Breda 27." generally associateding to find a way to fully meet with light aeroplanes especially this policy and at the same time built for displays of aerobatics preserve any goodwill value there such as have been seen in China, might be in the business of the are seldom if ever met with in City Company of New York Inc. high-powered military planes, and formerly the National City Com-
The
P
were commented upon with en- thusiasm by the members of the Chinese Mission,
YANG TIEH MISSION
Luncheon in
London
.pany.
"When the Trust Agreement re- lating to the stock of the City Company was recently amended by the written consent of the Trustees and Holders of upwards of 75 per cent. in the amount of common stock of the Bank among additional powers vested in the Trustees was power to place the "Goodwill is a nebulous thing. Company in voluntary dissolution Insofar as it is attached to the and transfer and deliver the stock name of the City Company It can-
of the Company to the Bank, Tot be realised on, because the thereby terminating the Trust, continued used of the name would These steps have been taken and, identify the user with the Bank in connection with the discon- and that cannot be permitted | tinuance of securities business, without control by the Bank, they bring the relationship bạn which is forbidden by law. Insó far as it may be represented by personnel trained in investment banking business, such personnel consists of three individuals whom the City Company is not in a position to deliver to a prospective purchaser.
stock of the City Company or trom purchase of the business of the Cly Company.
tween the Bant and the Company into conformity with the Banking Act of 1933. The Federal Reserve Board has so ruled under Section Twenty of the Act so-called "Divorce" Section. A programme also has been submitted to the Comptroller of Currency and ap- proved by him: The capital of the City Company was originally derived from special dividend paid by the Bank and it seems appro
reated in the business of the Com- pany be returned into the Bank "Bome officers and employees
Unparalleled Taxation
London, June 6. For 15 years they have been
General Yang Chieh, head of scale for in full and of paying a further paying taxation on a
the Chinese Mission of air experts
""The ownership of control of au sum of over £20,000,000 on De-which it would be hard to find a
or a visit to Europe, was present time, cember 15 next, that is to say, parallel. During all that
at the Epsom Derby to-day. He Investment Banking Company by over £70,000,000 for the current taxation has been heaviest in Bri- will proceed to Berlin to-morrow. the shareholders of a Bank would
for a considerable liyear, or of suspending all interim tain, and
He had a long conversation be unlawful, whether such owner- payments pending final revision, period, it was twice as high as in yesterday with Lord Hailsham, ship came from distribution ofpriate that money at present in- by agreement, of the existing war the United States. Including all Secretary of State for War,
Federal, State and local taxation, debt settlement.
Mr. Quo Tai Chi, lunched with the This taxation, amounting to
Chinese Mission and the The Arst of these alternatives would necessitate a corresponding close on one-quarter of the na-guests included Sir Herbers, Creedy, demand by the British Govern- tional income, has aggravated the Sir Phillips Ready and Air, Vice- problems over a long Admiral Sir Edgar Ludlow Hewitt ment from their own war debtors, British for it would not be possible to period, and the necessity of main--Reuter. contemplate a situation in which taining an army of unemployed Britain would be called upon to has constituted a formidable pro- war blem to national finance ever resume payment of their obligations to others in tull while since the war ended. continuing to suspend all demands for payment of war ghiigations due
to them.
The resumption of full payments to the United States would there fore revive the whole system of inter-Governmental war debt-pay ments, and would postpons inde finitely the chances of world re-
covery....
Gross Injustice To People This enabled the Government to I order to restore national re-adjust the finances Imposed in credit in 1931, the British people 1931, and to restore part of the accepted patiently and hopefully cuts of salaries and, the whole of the increase in taxation, accom- the cut in unemployment allow panied by the rigorous control of ances, the continuance of which expenditure, cuts in salaries, and was imposed ever since on the na- allowances of the unemployed, and tlon's conscience. but for these measures, the Budget would have again showed a deficit
It would have been gross act of legal injustice to have deluded the
new of the City Company wil be re- "The organisation of Investment Banking concern as a tained to handle the liquidation of successor to the City Company and its affairs. A number of principal in which shareholders of the officers resigned and will I hope Bank would be offered less than a make other connections satisfac- controlling, Interest would involve tory to them. Neither the name in the first place a recommenda- nor the files nor other indicia of tion by the Bank to its share the goodwill of the business will holders to place new capital or to be sold or given to anyone. leave a substantial amount of old capital at the risk of future securities business and in the second place sponsorship by the Bank of a new Investment Bank Ing concern wihous, power on the part of the Bank to control its policies. Your Directors after
last year had it not been possible British people into paying the mature consideration then were
After full deliberation, the Bri- to secure, by, a conversion opera-] United States while suspending unwilling to place the Bank back tish Government came to the con-tion, a reversion of interest on the war debts due to the United King-of such a plan, I personally be- clusion that they could not assume charge proportion of the public dom, the note adds British Wire- lleve in future the Bank should
less.
be free of any connection either the responsibility of adopting a debt.
The Bank will continue that part of the business of the City Company which has to do with underwriting and trading in the United States Government, State, and Municipal Securities, as per- mitted by law.
There will be no successor to the City Company.
"Yours very trul James Perkins, Chairman Directors Any existing contracts will be completed
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