FRANCE, GERMANY AND BRITAIN.

Auckland Star, Volume LIV, Issue 131, 4 June 1923, Page 4

FRANCE, GERMANY AND BRITAIN.

It seems to be French policy to disparage and reject every German oft'er before it is made. The speeches of the French President in the liberated provinces reported to-day are interpreted as being a comment; im the impending renewal of negotiations by Germany. They may be something more. They may be directed also at the new British Prime Minister and his colleagues. .Mr. Baldwin has not only taken into his Ministry Lord Robert Cecil, who is the foremost advocate of the League or Nations in the British Empire, but has invited Mr. Reginald McKenna to be Chancellor of the Exchequer. The significance from the French point of view of this invitation, which apparently has been or is going to be accepted, is that Mr. McKenna has long held views on reparations that are not agreeable to France. In an.address that ho gave as a banker last year he stressed the economic side of the problem, declaring that most of Gerriany's payments must come from exports, but that to export she must also import heavily, and payment for imports must be a first charge on her exports. What she could pay over to the Reparations Commission would be her exportable surplus, and he did not think that this could possibly be made suflicient to meet her liabilities under the Ultimatum of London, which is the demp.nd that the French are standing for to-day. Germany, he said, could pay first in this exportable surplus, then in surrender of foreign securities, and thirdly in direct employment of German labour abroad. He also declared that before Germany could develop her foreign trade to such a degree as to have an exportable surplus large enough to pay what was required under this ultimatum, the foreign trade of Britain "must dwindlo into insignificance." This explains why the French have received unfavourably the news of the invitation to Mr. McKenna to join the Government. It is extremely unlikely that Mr. McKenna has changed his views, or that he would take oflicj without having an assurance from the Prime Minister that the Government's policy on this vital matter would agr.'e with them. On the other hand, is Mr. Baldwin prepared to face the opposition of those Conservatives who back France whole-heartedly? In the meantime the French President announces that France means to stay iv the Ruhr, that she is not interested in Germany's capacity to pay, but only in getting her debt, and that she is in need of advice from nobody. France is underStood to rely upon the demand of 1021 that set Germany's liabilities at £6,600,000,000. That is to say, the French Government announces that the Ruhr will be occupied until Germany pays £6,600,000,000. Very few people whose opinion carries any weight believe that Germany can pay six thousand millions, so that if the President is sincere his statement practically means that France will occupy this territory permanently. Is this a situation that England and other countries can contemplate with equanimity? Communistic disturbances are reported from the Ruhr, and outbreaks from other parts of Germany, and the mark has slumped to a point as low as that of the Austrian krone. The masses in Germany happily show little sympathy for 1 Communism, but will they remain in this attitude when the most important industrial section of their country continues to lie occupied by foreign troops and the purchasing power of their wages falls in so steep a decline? And how will it profit France, from the reparations point of view, if Germany sinks into bankruptcy and industrial and perhaps political chaos? The fall of the mark to the Austrian level is ominous.

Austria reached a stage of perilous impoteney, and was only saved by 1 lie vigorous and capable intervention of the League of Xations. Germany is industrialised to an enormously greater extent than Austria, but the fate of the smaller country should be a warning. Perhaps in the end the League will be called in to settle the larger problem.