Evening Post. THURSDAY, JULY 16, 1931. FRANCE YIELDS A POINT

Evening Post, Volume CXII, Issue 14, 16 July 1931, Page 12

Evening Post. THURSDAY, JULY 16, 1931. FRANCE YIELDS A POINT

On Tuesday we were told that despite the bank crashes the Berlin money market was being saved from panic by the belief that, after failing everywhere else, Dr. Luther's appeal to the Bank for International Settlements at Basle would have success enough to tide Germany over the crisis. This hope was encouraged by his immediate achievement in getI ting a decision from the Bunk with regard to re-discount credits which | meant the renewal for three months of, an expiring short-term credit of £20,000,000. Nor was the satisfaction 'confined to Germany. All over Europe the feeling was "for this relief, much thanks," though it was doubtless strongest in Germany and the neighbouring States. The Stockholm banks had refused to cash German cheques; two Latvian banks had temporarily suspended payment; in Hungary and at Danzig all the banks were closed. The reaction to Germany's troubles and to her hopes of recovery is naturally readiest on the part of her nearest neighbours, but where the issues are so grave it spreads indefinitely. According to, a London message published yesterday, anxiety in the capitals of Europe, particularly in Berlin, has been relieved by the news of the momentous decision made by the Bank for International Settlements,, which has resulted in a wave of optimism and the belief that Germany's troubles -within a few days will be over.

And in London itself the stock markets became much steadier, and in foreign exchanges the German mark strengthened.

But Dr. Luther's preliminary success has not been followed up, and every stock market in Europe must have already felt the i shock of today's news. "The Times" is reported as saying that

following the Basic- discussions all indications point to the conclusion that, uiJess tho demand for political guarantees is abandoned, there will result a complete impasse which will imperil the whole economic stability of Europe.1 The demand can only be that of the nation whose sole opposition has now blocked the Hoover Plan for nearly a month. The President of the-Reicb-bank has not escaped France by going to Basle, and it is necessarily not her financial experts on the directorate of the Bank for International Settlements but her Government that must determine the conditions .on which she will assent to the grant of any further concessions to Germany. And if the French Government is still as obdurate as ever there is unfortunately not the slightest ground for supposing that its attitude does not faithfully represent the attitude of the French nation. Like the Bruening Government in Germany, the Laval Government is weak, but it also resembles the other Government in having a united nation behind it' in a, policy of no-compromise on this Franco-German ' issue. Instead .of yielding an inch at Basle France has, if the "Daily Herald" is not mistaken, put up her terms. Her previous demands were large enough when they were limited to the abandonment of the Austro-German Customs Union and the "pocket" battleship. But now, just when- Germany appears to be weakening on 'the second and far the less important of these issues, France has added the disbanding of the German "Steel Helmets" to her little list. It looks as though she were so set on German default that she is determined •to make a settlement impossible. The painful speculations suggested by the attitude of France are fortunately cut short at this point by the arrival of a Paris message of a very different tenor:— , Official: France has telegraphed tho Bank for International Settlements forgoing the unconditional annuities duo from Germany to-day. This gesture is regarded as a most helpful influence. At the first glance this looks as though France had unconditionally forgone the whole point in dispute. What President Hoover proposed was an all-round suspension of war. debt and \ reparation payments for, one year. In the Franco-American compromise which was reported on the Bth inst. this proposal was qualified by the condition for which the French Government had contended from the first:— That the German Government shall continue the payment of unconditional annuities during this period. The comment of the French Premier on this settlement was that, though ii involved "a hard sacrifice," it would be noticed that the Government had not allowed Franco's sacrod rights in regard to reparations to lapse. The point did not escape the notice of the Germans, but they put it differently. It was the sacred right "to bleed us white" that France had preserved, according to one of their papers, and according to another: Petty narrow-minded French commercialism has riddled the plan. It shows Franco as tho real obstacle to peaco. i Is it possible that France.has now patched up all the holes with which she had riddled the Hoover Plan? that she has ceased to be an "obstacle to the peace" from the German

standpoint by making an unconditional surrender? Though this conclusion is suggested by die official message, it seems impossible. Like the German Government, the French Government stands between the devil and the deep sea. It dares not give Germany even the. concessions that it may think reasonable for fear of the intense nationalism of its own people. How, then, could it reverse the attitude on which it secured a vote of confidence in the French Chamber of Deputies by 386 to 189 and in the Senate by 197 to 5? This presumption is confirmed by the comment in the message itself: This gesture is regarded as a most helpful influence.

A concession which conceded substantially the whole point in dispute and opened up for Europe such a prospect of peace as it has not enjoyed for years would be most inadequately ' described as either a "gesture" or as a "most helpful influence." Perplexing as it is to receive what is obviously a very important message 'in such ambiguous terms and with so meagre a comment, it seems wisest therefore not to expect too much from it at present. But at the least the message must surely mean that France has for once abandoned the intransigence which had turned to fear the hope inspired by President Hoover's intervention; that she does not contemplate with a light heart the impasse which had filled "The Times" with alarm; and that she has not insisted on Germany's being posted as a defaulter for diverting to wages most of the £36,000,000 that was due for unconditional annuities under the Young Plan on, Wednesday. If that tantalising message means more, so much-the better; but even if it merely means a breathing-space in which reason will have a chance to assert- itself it may make all the difference between peace and war.