Dunners & Defaulters

As a fine gesture toward the U. S. holders of $2,000,000,000 of defaulted foreign bonds, Congress last spring voted $75,000 to establish a Government protective committee. Secretary of State Hull, who did not relish the U. S. Government in the official role of an iron-fisted dunner, persuaded President Roosevelt to sidestep this provision of the Securities Act by sponsoring a potent, but purely private, protective agency (TIME, Oct. 30). Last week the Foreign Bondholders' Protective Council completed its organization, prepared to swing into action.

Chief purpose of the Council is to present a united front to 19 nations which have defaulted on their external debts. Foreign bonds are so widely distributed in the U. S. that the Council last week estimated that the average holding was only three $1,000 bonds. The Council will cooperate with existing committees, will eliminate confusion arising from rival committees attempting to negotiate with the same debtor, will pass on all settlements. But the Council views its job as something more than squeezing blood out of turnips. Well aware of the effect of private debts on international relations and foreign trade, it will seek financial support not only from unhappy bondholders- and the issuing bankers but also from: 1) banks engaged in financing foreign trade, 2) importers and exporters and 3) "foundations and public-spirited citizens." An annual budget of $100,000 will be raised in part by offering non-voting Council memberships to "founders" who pay a large lump sum and "contributing members" who pay yearly dues.

Last week Newton Diehl Baker. Philip Fox La Follette, Charles Francis Adams, John Cowles, Roland Morris and 12 other potent members of the Council got together and, presumably on President Roosevelt's say-so, picked Raymond Bartlett Stevens to head the new agency. For the last six years Mr. Stevens has served as foreign adviser to little King Prajadhipok of Siam, whose country has an external debt of -L-8,500,000. An able New Hampshire lawyer, Mr. Stevens entered Congress in 1913, ran for the Senate at the end of his first term, was defeated. Woodrow Wilson kept him in Washington as special counsel to the Federal Trade Commission, later as Wartime vice chairman of the Shipping Board. Last winter President Roosevelt persuaded him to get a leave of absence from the King of Siam to serve for six months as a Federal Trade Commissioner. When the Council was launched, Mr. Stevens had already packed his bags to return to Bangkok and little King Prajadhipok.

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