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THE BIRMINGHAM AGE-HERALD VOLUME XXXXV I- ■■ -■-~ -_ BIRMINGHAM, ALABAMA, WEDNESDAY. OCTOBER 13, 1015 12 PAGES Nl'MBER 1H0 BULGARIAN OFFENSIVE BEGINS AGAINST SERVIA; TWO POSITIONS ATTACKED .... j! Bulgarians Direct Energy Toward Capture of Rail ways Leading From Nish I to Saloniki BALKAN SITUATION MOST PERPLEXING TO ENGLISH DIPLOMATS taly Not to Participate in Balkan Campaign—Rus ' sian and French Forces i on the Aggressive k Paris, October 12.—The Bulgarians re attacking the Servian positions in wo localities, one at Yelikisvor, in he region of Zasitchar, am) the other t Kadibogaz, in the region of Kniash Ivatz, says a dispatch to the Temps rom Nish. The Temps says the distance be ween Zasitchar and the Roumanian rontier upon the Danube is not more han 30 miles and that the Bulgarian ttack is directed against the railway rom the Danube to Nish, Uskub and | aloniki, connecting Roumania with he Aegean sea. London, October 12.—(6:47 p. m.) Vhen the Servian minister at Athens fficially advised Premier Zaimis of he beginning of the Bulgarian of ensive against Servia, Premier .aimis, according to a dispatch to the Itar from Athens, replied: “Greece remains in the position of rmed neutrality.” London, October 12.—Servia is be tg attacked from the north and the ast. The Austro-Germans, after heir capture of Belgrade and Semen ria, are advancing southward, while he Bulgarians are trying to inter upt communications north and soutli f Nish, Servia’s wartime capital, and 3 attack the Serbs on the flank if hey are driven back by the iierman ield marshal, Von Mackensen. Servia to Remove Capital The situation is admitted to be serious, ot only for Servia, but for the Whole Hied cause. It is asserted that the ervians are inflicting heavy losses both n the Austro-Germans and Bulgarin ns, ut with their army of about a quarter (f a million men they are believed to ave little chance of making any pro inged resistance against 300,000 or 400,000 >ustro-Oermans and probably 200,000 Bul arlans. They are arranging for the ransfer of the capital to Monastir, in the xtreme southwestern corner of the king dom. Greece apparently lias decided to ig nore the treaty under which site is sup posed to go to the assistance of her ■ervian ally In case of an attack. Premier taimls said when notified of the Bui .arian attack that Greece "remains in a position of armed* neutrality." The quadruple entente has decided to ake energetic action. As soon as news ■f the Bulgarian attack on Servia wai eceived in London the Bulgarian millin er was handed his passports, and M, ’lvtanl, the French prime minister, in he Chamber of Deputies today declared hat France, Great Britain and Russia ad decided to take joint action and that omorrow "Russian troops will be fighting y the side of ours.” Allied Forces Continue to Land An Anglo-French force is known to be Hiding in Saloniki, but there is consid rable speculation as to wliere Russia will liter the l)alka)i conflict. It is reported hat Grand Duke Nicholas is to command he Russian Balkan army, which, it is ■elieved In military circles here, would lake the Bulgarian people less willing o fight against Russia, there being a eep veneration « among the Bulgar in peasants for the Emperor of Russia nd hts family. It Is understood that Italy has decided iOt to co-operate with the allies in the lalkans, the Italian government believing hat troop* cannot be spared for any ampalgn other than that In Trentino and "rlest. Nuw that Austria and Germany have ntered on their Balkan enterprise, which j Interpreted as the first step toward an ndeavor to get a German empire in the ear east, there can be no drawing back, ut the allies hope that with a vigorous ffenBive both on the east and the west hey at least can prevent the sending o( ny large reinforcements to Von Mbcken en. French on Offensive The French In both the Champagne and pitols regions of France are continuing heir offensives, but not on the scale ol he recent attacks. The British aftet heir success In repelling the big German ttack are preparing for another move, ut at what point only the commanding enerals know. Now that they have tarted. it is believed here that the Brit ih and French on the western line will ive the Germans no rest. It I* much the same on the eastern rent. The Austro-Germans having nought their offensive to an end, except n ithe region of Dvlnsk, the Russian! ave recuperated wonderfully and arc trlking back. The Germans clainf an ther success west of Dvlnsk. but they re still fighting west of Illoultst. They iso announce that Russian counter at sicks have been repulsed south qf th« ■rlpet river in Volhynla and in Galicia. The Russians seemingly have entirely egained the Initiative, especially In Gall la. Here Petrograd reports the Russlunf ave won a victory on the River Strlpa 'he territory on which this battle was ought marks the extreme left of th< tnsslan battle line. The Russian often Ive oh this front started several weeki go when successes were won at Tarnopo nd Trembowla. Austro-German rein orcements were rushed up and hard aiu icessant fighting has taken place since teneral Count Von Bothmer command! he lUstro-Germans In this sector anif he German official report of today sayi hut the position of the "German troops' rlth him is unchanged. Heavy English Pension Roll London, October It.—More than $5, 00.1(00 weekly Is being paid by the Iritlsh government to the wives and hlldien of soldiers serving with tba olora. This ministerial statement wai 4>4e la the House or Commons to' < ■ YUAN SHI KAI MAY BECOME EMPEROR OF NEW CHINESE EMPIRE People From All Parts of Republic Fend Messages Urging That the President Accept Crown Peking, October 12.—In a mandat© dated October 10 and issued last night President Yuan Shi Kai. acknowledges the receipt from all the provinces of the Chinese republic of petitions urging a restoration of the monarchy. He states emphatically that the will of the peo ple must solve the question of a change in tlie form of government and that any change must'be in accordance w ith the constitutional compact. The people’s real wishes will be fol lowed, President Yuan Shi Kai de clares. He orders those in control of the elections to carry out their duties strictly in accordance with the law. It is learned officially that the na tional assembly will bo called early next year and that whichever form of gov ernment is decided upon in the impend ing expression of the popular will the government will be a constitutional one. President Yuan Shi Kai's statement indicates that he will accept the Em perorship if tlie monarchical form of government is declared for by the peo ple. DICKINSON PRAISES GARRISON’S POLICY Says Whole Country Is Becoming Alert to Need of Adequate Defense Chicago. October 12.—Jacob M. Dick inson, former secretary of war, told the Chicago branch of the National Security league tonight that the whole country is becoming alert to the neces sity for more adequate defense. He praised Secretary Garrison, who lie said was tlie iirst of those in admin istration circles to take a decided stand for preparedness. Garrison clearly saw our help lessness,” Mr. Dickinson asserted, “lie understood that the future might well ha ve possibilities seriously threatening our national life, and boldly’ took a pub lic stand for armament. "The Pros'd ent is deliberate, pene trating. studious and patriotic. lie says little but does things with tremendous power.” Mr. Dickinson said that militarism need be feared only if military govern ment in this country should dominate civil government. CARRANZA NAVAL FORCE DEMANDS VILLA CITY’S SURRENDER Guaymas. Mex., October 12. —(By radio to San Diego.)—The Carranza gunboat Guerrero with the transports Korrlgan II, Jesus Carranza and two senooners ar rived off herb last night loaded with troops under General Dieguez, who has demanded the surrender of the city from Villa forces. The commanding officer of the 1'uited States cruiser ("hattanooga informed Gen eral Dieguez that sufficient notice should be given the towns of Guaymas and Em palme before commencing bombardment to permit noncombtants to reach a place of safety. Dieguez is said to have replied that lie did not think it would he necessary to bombard, but if surrender were refused he would establish a neutral zone where noncombatants w’ould be safe. A special rain with 40 Americans left here yesterday for Nogales, but the train was held up at Carbo. because of burned bridges. Railroad officials said the train may return to Guaymas. There are 110 Americans remaining in Guaymas. MONUMENT TO JOHN TYLER UNVEILED AT RICHMOND, VA. Richmond, Vn.. October 12.—A monu ment to President John Tyler, the first erected by the federal government to any public man who renounced allegiance to the union in 1861. was unveiled today in Hollywood cemetery here. Governor Stuart presided and Mrs. Munford Ellis, only surviving daughter of President Ty ler, unveiled the monument. The fund for the monument was appro priated in 1919 by* Congress, w’hich was represented at the unveiling by Sena tors Martin, Swanson and Fletcher and Representatives Baker of New Jersey’ and Roberts of Massachusetts. SPLINTER REMOVED FROM SPINAL COLUMN Paris. October 12.—»n operation, un paralleled in surgical practice for the re moval of the splinter of a shell embedded the whole width of the vertebral canal and the suturing of the complete sev ered spinal cord has been performed by Dr. Emil Girou. In communicating. the details of his achievement to the Academy’ of Medi cine, Dr. Girou said he had undertaken the operation when the man apparently was dying and that it had resulted in a manner exceeding his greatest hopes. The patient. Dr. Girou said, was now’ able to Hiove his legs: his sensory powers W’ere gradually returning and the wound which .ordinarily should have killed the man was healing. VICE PRESIDENT OF FORD CO. RESIGNS Detroit, October 12.—James Couzens an nounced here today that he had resigned as vice president, treasurer and general manager of the Ford Automobile com pany. * "I could not agree with Mr. Ford's pul> lie utterances with reference to war un preparedness and other subjects of world importance,” Mr. Couzens said. Mr. Couzens has been associated with Mr. Ford in the manufacture of automo biles for 13 years. Ford directors will meet tomorrow to act on the resigna tion. HOLLAND TESTIFIES FOR VON BERNSTORFF Chattanooga, October 12.—By direc tion of Count Von Benstorff, the Ger man ambassador, Adolph Muller, Ger man consul at Atlanta, haB secured the affidavit of Lawrence Holland, 18-year old son of A. E. Holland, of this city In connection with the summary execution of the captain of the German submarine U-27 by the members of the crew of the British vessel upon which young Holland *M at that time serving, r Opening of Greek Parliament—View of Royal Family _ ..— 11 .n* a " .: arm 11 _____ / A new photograph of the King of Greece with hit family. Photo taken tincc hit recent iUnett. Ijeft to righi— Queen Sophie, Prr '* Katherine, Pri nW C Helene, Prineettj ► , d «wks l— Opening of the latent * Greek. Parliament in Athene, marking the re turn to potcer of Pre mier Fenezeloe. In the centre - the Biehop of Athene. Front rote the Ghovmarie old Cabinet, Armg andhavy office/ e ■ m the rear. •ooooooooooooooooooood URGE STUPENDOUS NAVAL PROGRIME Plan Contemplates Doubling American Navy Within Five Years—Tremend ous Expense Involved Washington, October 12.—Fifteen to twenty fighting ships of the Urea (Inaught and battle cruiser type with a proportion ate number of seagoing submarines, coast submarines, scout cruisers, destroyers and auxiliw i ie»—enough to moke a » ew Ameri can fleet—is contemplated by Secretary Daniels for recommendation as a five year building programme for the navy. President Wilson and Secretary Daniels have discussed informally the navy's needs and are agreed that to be adequate ly prepared for defense the fleet's strength must he almost doubled in the next five years. Another conference between the President and the Secretary will he hold Friday at which the total number of ships to be asked for probably will be fixed. The five-year naval programme when completed would add in addition to dread naughts and battle .cruisers, nearly 100 submarines, about 70 destroyers and sev eral scout cruisers and fuel and hospital ships. An Important part of the. programme, too.. will be a proposal for a large in crease in personnel. Appropriation for at least 8000 additional men will be asked for the first year to make up present deficiencies, and an adequate number will be sought to mail new ships built in the five-year period. (treat Expense to Nation The total cost of the proposed pro gramme for the first year is put at nearly $248,000,000,000 or about $100,000,000 Increase over last year. Just what construction should be provided for the first year has not been determined. As to the approximate number of ships the fleet should have at the end of five years, officers of the general board and Secretary Daniels are understood to he in thorough accord. Admiral Benson, chief of naval operations, is being consulted daily b ythe secretary, and within a few days the complete programme is expected to be ready for examination by President Wilson. It is considered probable that the con struction programme for the first year will exceed that of succeeding years that urgent deficiencies may be filled promptly. The general board. has been consistently recommending four battleships a year, but last year Congress provided only two, al though the building of a third was made possible by the sale of the battleships Mississippi and Idaho to Greece. The previous year only one battleship was granted. The general board’s original plan of handling a fleet of 48 first-class battle ships by 19120 consequently has sufficed materially. Will Be Discussed in Message It is understood President Wilson in tends to discuss the naval programme in his annual message, and to make of it an administration measure. The building programme last year pro vided for 16 submarines, so that the total of the undersea craft) built and building, now Is TO. Although effective means of combatting undersea warfare apparently have been found in Europe, It is the pur pose of the navy department to recom mend at least 30 submarines for next yea'r. In the next four years, however, an av erage of 10 submarines a year, a few of which would be fleet submarines, would bo maintained. That would bring the total to about 170 in five years. Tt is not known what the plans of the navy are for the organization of the new fleet, but the general belief In naval quar ters Is that the plan of having a fleet in the Pacific will figure materially In the new programme. Albert Thibedaux Dies New Orleans, October ,4f.'—Albert Thlbe daux, grandson of fonrter Governor Thlbe doux of Louisiana, who was charged with having shot and fatally wounded Deputy Sheriff Edward Cauthreaux, at Sherlever, La., Saturday night last, died in a local hospital here today. Gauth reaux, who died here Sunday night, drew a revolver after he had been ahot and fired at Thibedaux, the bullet striking the latter in the aboutflen. To Diacontinue Service* London, October 12.—It was. announced today that Sunday evening services in St Paul's cathedral would be dlscomiri' ucd to conform with regulations respect ive tbs darkening of ftrsets. 1 ••••••••••••••••••••••••••••••••••••••'••••a••••••••(•••••••••«•••••••••••••••••••••••••••••••••••••••••••• Japanese Premier Tells Peace Congress World Peace Is Fantasy Pan Francisco, October 12.- Count Okuma. Japanese premier, and Dr. Ng Poon phew, a Chinese editor of 8mn Francisco, told delegates to the Inter national Peace congress today that world peace was yet a fantasy and would be until the militaristic order of things changed. In a message to the congress. Count Okuma said there was no hope for peace "as long as there exists nations or in dividuals who believe or exalt themselves as absolutely superior to others and t.) assert that superiority does not hesitate to appeal to material forces.” On the lioor of the congress tonight Dr. Ng Poon Chow added to Count Oku* mas statement: ’'There will bo wars-and more wars just so tan# as there arc two coder. lavs Jbrl tvro standards mol ality, one governing nations, the other individuals,” he said. The doctor said that even China was preparing. He blamed western militar f ism, which, he said, had not only par celed China, but had destroyed her ideals of peace, and he ca 11 ed Japan the dis turber of the peate of the Orient. "If the United States were as unpre pared it woubi fare no better than China at the hands of the world powers," he said. "China bus learned her bitter les son, and now is proceeding to abandon its concept that justice is the foundation of the state and to take up the practice of brute force. "Japan is the disturber of the peace in the Orient. She is essentially a mili tary nation, and she has in herself the perfect compilation ol the militarism of Germany and the navy-ism of England Her ambition is boundless. "With such neighbors, what must China do but prepare for defense? Before the European war broke out we imported a large number of men. followers of the Prince of Peace, from Europe, the seal of Christendom, over to 'heathen China, if you are pleased to caM us so, to in struct us to turn, our ploughshares int' swords ami our pruning hooks lute spears." Selfishness, jingoism, yellow Journalism and politicians are chiefly responsible fot misunderstandings that nave existed be tween the United States and Japan, said Mr. Kiyo Hue hull, a lecturer of thi Japan Society of America. Twelve Officials of Railway to Face Charges of Conspiracy New York. October 12.—Twelve direc tors and former directors of tile Now York. New Haven and Hartford railroad will go on trial in federal court here tomorrow charged under the so-rcalled criminal clause of the Sherman law with conspiring to monopolize the transpor tation traffic of New England. Prospects are that the case will not go to the jury for a verdict much before February 1. Upon this verdict will depend the disposition of the cases of six other defendants who gained a separate trial. Probably in no government prosecu tion heretofore brought under the Sher man law have government investigators had to deal with so many intricate financial transactions as have been dis closed in New Haven operations dur ing the 25 years in which it is alleged to have brought under its control virtu ally every railroad, steamship line and trolley company in New England. This is the reason a long trial is expected. Charles S. Mellen, former president of the New Haven, probably will be one of the first called to the stand of the more than 100 witnesses sub poenaed. The 12 defendants are William Rocke feller, Lewis Cass Ledyard, D. Newton Harney, Robert W. Taft, A. Hoaton Rob ertson, Edward .I>. Robbins, .Tames S. Hemingway, Charles F. Hr.ooker, Charles M. Pratt, Henry K. MeHarg, Frederick F. Brewster and George MacCulloch Mil ler. Confer on New Revenue Law Montgomery, October 12.—(Special.)—Tax Assessors D. E. McLendon of Jefferson county, David C'rosland of Montgomery and W. M. Hendon of Macon conferred today with Chairman Thomas YV. Shut of th<‘ state board of equalisation rela tive to certain featanres of the new reve nue law passed at the recent session of the legislature. TODAY’S AGE-HERALD 1— Rulgurlan offensive begins against Servia. Japanese premier declares world peact is a fantasy. Government,'defends income tax. bill authorising American war loar ratified by House of Commons. 2— Reserve board will delay placing Latin American agenclea 3— The Holland letter. 4— Editorial comment. 6— Good ftpagp association denounces leg islature. Attendance record for State Pair agalr " shattered. ., Little boy badly injured by auto. To view link of Jackson highway. (I—Society. , 7— News qf Ensley. 8— Sports. , 8—Waller and Wallace tilt in HeaBeraci probe., » 11— Mgrk'ts. •>.. _ - 12— Pierce fighting continues, oil westeri DAY PASSES QUIERY IN CHAIM S. C. Hyde Reported Elected Mayor by Slight Majority. No Violence Charleston, S. O.. October 12.—Charles ton voters balloted today for Mayor and other city officials, while state troops were held in their armories here to pre vent disorder. The day passed off quietly, however, and the troops were not called on. At 10 o'clock tonight they still were at the armories, no orders having been given for their release. The race for the mayorality nomination was close with ap proximately two-thirds of the vote count ed. Tristram T. Hyde was said to be leading for mayor by neary 100 votes. Disorder had been predicted, it was said, by adherents of Hyde, opponent of Mayor John P. Grace, for mayor in the democratic primary, which nomination is considered equivalent to election. Affida vits were presented to Governor Manning recently at Columbia asking for troops, and these were hacked up by the request of Sheriff J. E. Martin, who also sought and received permission to swear In spe cial deputies. He had 50 deputies sworn in. The troops comprised four com panies of the national guard of South Carolina, and three divisions of naval mi litia. The local city council and various other I citizens went on record as opposing the measures taken by the governor and shef iff, declaring them unnecessary. Columbia, S. C., October 12—No state ment could be obtained from Governor Manning tonight as to how long troops would be kept 1 n their armories at Charleston, where thtjy had been or dered to be ready to take up police duty, should that prove necessary In today’s primary. It was stated unof ficially, however, that the troops prob ably would be released tomorrow'. Pardon Board in Session Montgomery, October 12.—(Special.) Members of the state board of pardons met in monthly session today in the of Moe-of the secretary of state. The board received a large number of applicants for clemency, though only a few' cases \ erC acted on favorably. The board will * i iakte its recommendations to Governor Henderson when he returns to MontgOm * ryv' Members of the board are: Attor ney' William L. Martin, Secretary of ate John Purifoy and Auditor M. C. Allgood. Von Papen Not Molested Washington, October 12.—No action in ti e case of Captain Von Papen, the Ger man- military attache here, who referred t<* Americans as “Idiotic Yankees" in a 1- iter to his wife, is expected to be taken i the state department. Officials have i 1. on> unable to decipher Von Papen's .upi— to his government found on .l.ung* Archibald and it waa Inferred that > no attention wua paid tortile letter to ilia "“f :| a . GOVERNMENT FILES BRIEF IN SUPREME COURT DEFENDING BIG INCOME TAXES _ Direct Taxation of Large! Incomes Mould Relieve Poor of Great Burden of Indirect Taxation INCOME TAXATION TENDS TO SHIFT BURDEN UPWARD i Attorney General Defends Clauses Exempting Cor porations as Necessary to Avoid Double Taxation Washington. Ot tobei 12.—Heavier taxa tion on big incomes as a teller from the "dlspioportiomile share" ol govei'i. mental support borne by the poor under indirect taxation was defended today by Hie government in a brief filed with tite supreme conn in the pending income lex fuses. The brief bears the mimes of Attorney General Gregory, Solicitor General Dn\ is and Assistant Attorney General William Wallace. Jr., und represents months’ of study of all the various attacks on tite Income tax, the success of which would reduce tlie government’s Income £>2.000, 000 a year. "The ordinary system of indirect taxa tion on consumption places on tite poor persons a disproportionate share of the burden of government support," say tit > brief, in reply to a charge of discrimina tion in tite additional or sur-lax on in comes of more than $20,000. Income Tax Helps Poor "Income taxation tends to shift t tic burden upward. It is undeniable that Hi'' greater the Income the greater tite fuse with which the payment of taxes is met. Even allowing tor the normal inevitable increase in the 'senie of liv ing, h« wlm lias tite larger income can tite more easily shoulder the burden .f increasing, as the amount of tite income Increases, not merely the total tax. but also the rate ot taxation. At least Con gress lias, in its discretion. cU termined that the heavier burden can he carried more easily by the larger income, and It is not for tite courts to say that such classification is outrageous," As to alleged discriminations, the gov ernment contends Congress has the rec ognized power to make classifications so long as tiiey are not unnatural and are bused on real distinction. Exemption of persons from taaxtion on the first $:iooo income and taxation of corporations on all income Is justified on the ground that corporations have no personal or family expense. Alleged Discrimination Complaints or discrimination against holding companies by requiring corpo rations and not Individuals to pay a tax on corporate dividends arc met with the statement there Is a greater difference between Individuals and holding com panies than between Individuals and na tive corporations, and that the court has upheld n distinction in the latter Instance in the corporation tax cases. Collection of the additional tax from individuals and not from corporations is defended as avoiding double taxation. The argument that there is an unlawful dis crimination In the tax on husband and wife living together ill that they are en titled only to one exemption of $4000 is answered with the point lliat Congress was justified in making a distinction be tween the separate maintenance of two persons on the one hand and their com bined maintenance ut lesser cost on the other. Tite corporation tax decisions ate re ferred to in tite brief ns authority fur arty Interference of the tnx with the formation of holding companies, and ob jections to requiring corporations to col lect at the source is met with the con tention that there is a very real differ ence between a corporation with an in terest paying indebtedness ami one not ho organized. JAPANESE TROOPS MAY BE SENT TO BALKANS Tokio. October X?.—Bulgaria's par ticipation in the war and advicea re ceived here from Isondon that British opinion, in some quarters, at least, fav ors the dispatch of Japanese troops to the Balkans have reopened the question in Tokio of what Japan's future course will hr. There is a strong Impression here that the return from Paris of Baron Kikujiro Ishal, recently appoint- ! ed minister of foreign affairs, and pre- ! viouslv ambassador to France, is like ly to be followed by a full reconsider ation of the international situation with special reference to Japan's pol icy for the preservation of her own permanent interests. Another factor arousing; discussion is the arrival of UtiKues Theroux, editor of tlie Paris Matin, who although with out official mission, comes, it is un derstood, with introductions from and the .approbation of M. Delcasse, the French foreign minister to discuss mil itary questions with prominent Japan ese, with a view to determining wheth er the latest developments justify a change in Japan's decision not to send an army to aid her allies and the like lihood of dispatching troops to the Bal kan theatre. SECRETARY WADOO CROSSING CONTINENT Washington, October 12.—Secretary Me Adoo and Assistant Secretary Newton of . the treasury department 'eft Wash ington tonight for a three weeks’ trio across the continent snd back to study the public building problem. Mr. New ton is in direct charge of public build ings. Mr, McAdoo will speak tomorrow night in Indianapolis and he may make other addresses before he gets back. MI’S. Me 'Adoo accompanied him. j. v ?fit itm i j > * t U ..' » i ,. i T| •• ' • BILL AUTHORIZING Measure Passed Upon Rec* ommendation of Chancel* lor McKenna Without Much Opposition CHANCELLOR SAYS TERMS OF LOAN ARE VERY REASONABLE Defends Transaction as Nec essary to Maintaining of Foreign Exchange Mar ket at Normal Level London. October 12. A loan btll to confirm the action of the government in raising a I500.000.000 loan In the United Htntos in conjunction with France passed through all stages of the House of Commons tonight. Royal assent is expected as soon as the House of Lords has passed the bill. Previous to the passage of tho bill, Reginald McKenna, chancellor of the exchequer, explained the reasons Tor the loan and Its terms and replied to criticisms as to the rate of Interest charged and profits made by the under writers. These criticisms were made by a few members of the house. A large majority gave the bill their unquali fied support and it was passed unan imously. It is not believed here that the pass age of the bill will have an immediate) effect on the exchange rate. In fact, it is believed the government will have to come into the market and sell ex change before a pronounced or perma nent Improvement can be attained. To- * day’s news from New York that the British financial commission was dis cussing the exchange problem and the establishment of a further credit, had a slight hardening effect on the rate. Terms Fair ami Reasonable ChanciHor Reginald McKenna de fined the terms of the loan as fair and reasonable. v Deducting \ccrued interest, V*' '’ ^ the British 4 It pW cent "loon now stands at 96*4. As the American under writers took the loan at 90, ho ar gued, Great Britain was merely pay ing one-half of one per cent more than the market rate. "The loan," said Mr. McKenna, “la for the purpose of paying our trade debt and maintaining our exchange in the United States. Our Imports from North America have laregly increased since the beginning of the war and our exports have diminished. The in crease in imports for tho first six months of 1915, excluding government supplies not included in the custom* returns, amounted to £58,500,000 ($292. 500,000) ami the reduction In export* during the same period was £12,000,000, thus making the adverse balance £70, 000,000, McKenna Urges Passage "Sonic relief for this balance against us may be obtained by the sale in America of securities held In this coun try. Every effort has been made to ob tain relief from this course, but of it self tnis w'lll be insufficient.” “We should not be uoing our duty. * continued Mr. McKenna, "if we neg lected to take other means of -maintain ing the normal lev* 1 of exchange. I am sure the House will desire to » xpress its thanks to the commission. Its mem bers accomplished their tusk with skill and success. “The American people are not ac customed to large external loans, and I believe this Is the first of any mag nitude in the whole history of tho United States. We must not overlook the fact that there are many cross currents of opinion in that country. “Although the transaction was pure ly for the purpose of meeting liabilities already incurred, no little opposition was raised by some parties whose sym pathies were not on the side of the allies. 1 hope the existence of these parties will not be overlooked during the debate and that care be taken to avoid the use of any language that might be twisted by a hostile element to its advantage mid to tho detriment of the allies. “The loan is a trade transaction. Its terms are fair and reasonable, and l confidently recommend Its acceptance by the House.” High Interest Customary Mr. McKenna pointed out that when the fact was considered that, higher in terest was generally pufd in America, the terms of the loan were not more onerous than could reasonably have been expected. When the country was at war It could not hope to borrow in a neutral country on as easy terms as at home. He thought that the argument that the freedom of the loan from the in come tax was equivalent to paying an additional 1 per cent was fallacious. Putting the sum that Great Britain owes the United Btutcs today for trade engagements at £50.000.000 sterling, he said the amount could only be paid by the export of capital, presumably American securities. “But.” he added, “we said to our American creditors, “allow us to defer payments, upon such terms as can be arranged. They agreed, and we were thereby enabled to retain $50,000,000 of capital which we must otherwise have exported, and when we retain that cap ital we get the income tax on the div idends from it.** Replying to criticisms, Mr. McKenna said the house had received the pro posal more favorably than he had ex pected, as for the nation to pay *4 per cent for an Anglo-French loan at any time was startling, but when the mem bers remembered the circumstances h* thought they would agree that the commission had done extremely well. Tried to Get More It had hoeii (aid that tho Americano Sot an exceptionally Rood bargain, he continued, but they wore offered dou ble tho bargain and they would not take it. "Wo tried.” (aid llr. McKenna, “to Bet 12m.OM.000, then (El 00,000.000. The UPepypood an rage Mne* '