Debt Payments

Britain was scheduled to make on June 15 her quarterly payment of $68,160,000 for interest and sinking fund charges on her debt to the U. S. Treasury. Including this instalment, Great Britain will have paid back $228,000,000 on her original debt of $4,604,128,085.

The interesting feature of the payment was not so much its amount-- that is in accordance with a regular schedule for future debt retirement-- but the form in which the payments were to be made. In negotiating her debt agreement with the U. S. Treasury, Britain was allowed to make her payments at her option in U. S. Liberty Bonds at par. When former payments were made the Liberty issues stood at 98 or 99, so a perceptible saving to the British was thus realized. Now, however, owing to easier money in the U. S. this Spring, every Liberty issue is above par and no such saving is possible. It was thought, therefore, that the payment would be made in gold. This did not necessarily mean, however, that Britain would ship gold ingots to the U. S. Government. British dollar credits accumulated in the U. S. will merely be transferred to Washington. Payment on the debt would be made in gold only when the purchase of bills of exchange on the American market would be likely to depreciate the value of the pound.