ANGLO-GERMAN CLEARING OFFICE

Evening Star, Issue 21748, 16 June 1934, Page 15

ANGLO-GERMAN CLEARING OFFICE

DEPENDENT OH DEVELOPMENTS (British Official Wireless.) RUGBY, June 15. (Received June 16, at noon.) A favourable reception was accorded in the City to the announcement by Mr Neville Chamberlain that in view of Germany’s decision to suspend foreign cash transfers on State loans for six months from July 1 His Majesty’s Government intends shortly to propose legislation for setting up an AngloGerman clearing office unless a

satisfactory agreement ensuring fair treatment of British bondholders and British commerce is negotiated before July 1. The detailed arrangements and the particular bonds to which the proposed legislation will refer are being worked out, and it will depend upon the outcome of the negotiations with Germany. The Dawes and Young loans are affected by the German decision, and the maximum amount of the annual service, including sinking funds, on these loans is £2,230,000. Of this total the interest at 7 per cent, on the Dawes loan, in which there was no gold clause, amounts to £661,255, and with the sinking fund to about £1,000,000. The service alone accounts for £614,586, and the total service, including sinking fund, to £780,000. When the 60 per cent, allowance for the difference between sterling and gold payment is made the total annual service on the sterling issue of the Young loan is £1,230,000. A Note informing the British Government of the circumstances which led to the German Government’s decision to suspend cash transfers was handed by the German Ambassador to Sir John Simon at the Foreign Office. BALANCE OF TRADE. In view of the clearing house proposal, attention is being directed to the Anglo-German balance of trade. The overseas trade returns show that in ,1933 the United Kingdom’s imports from Germany were of a value of £30,000,000, and the United Kingdom’s exports to Germany, including freight on British vessels, was valued at £17,000,000. The warning given by Mr Chamberlain that the purchases of German bonds now held by foreigners will be made at the purchaser’s risk was taken on the Stock Exchange to indicate that any plan adopted would apply only to bonds in British hands before the latest development.