SCALING DOWN.

Auckland Star, Volume LXII, Issue 157, 6 July 1931, Page 7

SCALING DOWN.

EUROPEAN WAR DEBT.

Reported Move for Ultimate

Abolition.

MOBATOEIUM PAELEYS.

(United P.A.—Electric Telegraph—Copyright) (Received 10.30 a.m.) WASHINGTON, July 5. From consultations going on here among the Embassies it is reported that the Hoover moratorium plan is only the beginning of a drive in Europe for a drastic scaling down of Europe's debts and their eventual cancellation. It is also reported that as soon as possible after the Hoover plan is agreed to, there will be a movement for a European economic conference at which the whole financial and economic • situation, Ja the light of international debts, will be considered. The British, who are believed to be at the head of this movement, will demand a drastic reduction of armaments which, if successful, will save the European Powers £200,000,000 annually. A Paris message reports that an agreement has been reached between America and France concerning Mr. Hoover's proposal'for a war debts moratorium.

A communique which was issued after midnight stated that the Secretary of the United States Treasury, Mr. A. W. Mellon, had confirmed the acceptance by the United States of the principle of Germany's payment of the unconditional annuities under the Young Plan. Other important divergencies in the views of the two Governments have been smoothed out and those remaining, which are of lesser consequence, will be submitted to the Ministers. Mr. Snowden's Attitude. The cryptic statement of Mr. Philip Snowden, Chancellor of the Exchequer, in the House of Commons regarding equality of sacrifice in connection with the suspension of war debt payments related to the guarantee fund of £25,000,000 which France, under the Young Plan, is required to deposit with the Bank for Interuational Settlements, in the event of Germany's declaring a moratorium.

France argued that if she did not retain the unconditional annuity under Mr. Hoover's moratorium scheme, she could not be required to provide' \ this £25,000,000 in the event of a subsequent moratorium under the Young Plan, and in seeking a way out of the deadlock suggested . tentatively that Britain should agree beforehand to forego her /share of thp deposit, thus leading the way for the other Powers concerned, and relieving France of the necessity of making the deposit.

Mr. Snowden declined to subject Britain to any further commitments.

It is understood that under the agreement reached last night, France and the United States recognise that the question of the guarantee will not arise during the year's moratorium. If Germany thereafter should declare a moratorium regarding the conditional annuities, the unconditional annuity to France will offset any obligation on her part to pay the deposit. >. . '<

On the other hand, if Germany did not pay even the" unconditional annuity then France, by arrangement with the other parties to the Young Plan, would be absolved from the provision regarding the deposit.