ALLIES IN CONFERENCE

Auckland Star, Volume LIII, Issue 4, 6 January 1922, Page 5

ALLIES IN CONFERENCE

A MURKY ATMOSPHERE. BEXiOTO-PS PRIORITY " C_A_M. THE REPARATION EIMIT. (By Cable.—Press Association,—Conyrisnt.) (Received 10.30 a.m.) PARIS, January 5. M. Briand and Mr. Lloyd George held several preliminary conversations at Cannes, which are asserted to have proved satisfactory. Nevertheless the atmosphere on the eve of the conference is by no means clear. France's declaration that submarines should not be utilised in attacks en merchantmen has modified somewhat the feeling of resentment against France over her attitude at Washington. It is realised that Britain favours giving Germany some relief over the current year's reparation payments, in which she will have Italy's support, while France sturdily opposes further concession as regards the instalments due. There is a feeling between Belgium and France that the former is likely to cause trouble. M. Theunis, Premier of Belgium, and his colleagues, take the view that the total sum which Mr. Lloyd George proposes Germany should pay this year represents only the amount to which Belgium, under the priority scheme, is entitled. If Belgium is firm on this point the Allies will get nothing. M. Briand accuses Belgium of pursuing a, policy of isolation, and warns her that she may lose her priority rights. M. Briand apprehends that without Belgium's supnort for France, Britain and Italy may enforce the moratorium proposal!—(A." and N.Z. Cable.) Discussing the reparation* issue recently, the Paris correspondent of the, London "Observer* wrote: — Dominating all discussions in France U the now generally recognised financial position of Germany. The visit of the members of the Reparations Commission, which sits in Paris, to the German capital, indicates clearly the gravity of the crisis which is approaching. Certain pa}inents which are due from Germany next week are understood to'be covered, but on January 15 a sum of half a milliard gold marks should be paid, and even the French, who have been slow to believe in the incapacity of -Germany to pay, admit that there ia every prospect of the debtor country defaulting. _ , The payment of the milliard in August was the starting point of the present disaster. Apparently, in a panic, Germans who- poesess money are converting'it into foreign values. It seems impossible to prevent the crash, though the French note with interest the visit of the president of the Reichsbank to England, and there are rumours of a huge loan from British banks to save the Reichsbank. The trouble is, of course, that German possessions are already hypothecated under the Treaty. In these circumstances, it is perhaps natural that there should be a demand for the institution of a Commission of Debt, which would be expected to manage German finances for the benefit of .the Allies. The proposal put forward in many quarters. M. de Lasteyrie, the reporter of the Special Budget, which is placed at the charge of Germany, and covers pensions and repair of the North, has himself just returned from a visit to Berlin, and in a statement to his colleagues in the Chamber this week calls attention to the paradox that while the economic potentialities of Germany are immense, the monetary collapse is certain. He suggests the seizure of German Customs, and the general control of paper emissions. The Wiesbaden accord itself, which, coming earlier, would certainly have offered a way of escape, since, co far a-a France is concerned, Germany would no longer be olniged to pay ruinously in cash, but in kind I —tlie Wiesbaden accord itself is in peril; for, a3 the French clearly see, if there is a monetary collapse, there must be a political collapse; if there is financial chaos there will follow social chaos. Bankruptcy implies vast upheavals.

Unhappily there is no doubt that France will become exceedingly exasperated if she finds herself before an insolvent Germany, with a special budget in her own hands and a treasury deficit which is authoritatively estimated at well over twenty milliard francs. No sympathy need specially be felt for Germany, but France will be placed in an unpleasant position should this expectation of a complete German collapse be realised. I have been particularly interested in the views of M. Gaston Jeze, whom I regard as one of the clearest financial writer in France. He Is liberal in his views, but he issues a definite warning to British, American or' German politicians, who believe that France will be prepared to abandon any portion of her credits. Even were such a policy wise, no government could apply it. It would be swept away by popular indignation. He predicts energetic, military measures which will be useless and worse than useless, but the French people will be naturally angry. According to him only England and America are able to prevent this fresh European calamity by making the necessary sacrifices.