WAR DEBTS.

Press, Volume LXI, Issue 18303, 10 February 1925, Page 9

WAR DEBTS.

THE BRITISH NOTE.

WELL-RECEIVED IN FRANCE.

IBT CABLE—PRESS ASSOCIATION —COPTBIGHT.) (AUBTBALIA.V AXD X.Z. CABLE ASSOCIATION.) (Received February 9tli, 7.45 p.m.) LONDON, February P. The "Morning Post's" Paris correspondent states that official quarters regard Mf Churchill's Note as an entirely frank and friendly statement, and that M. Herriot was genuinely pleased. Experts are now examining the effects of the scheme. In regard to the war debt, tho Note states that tho British Government adhores to tho principle of the Balfour Note, but snys that parts of the Marquis Curzon's Note of August 11th, 1923, referring to Mr Bonar Law's proposals of January, 1923, arc clearly no longer applicable to tho existing facta of the situation, as it was written beforo tho framing of tho Dawes Plan and on the assumption that the German liability would be fixed at a figure less tliau that adopted in the Dawes Plan. These assumptions are no longer teaablo. Britain and Reparations. The principle of the Balfour Note is that Britain should receive from Europo payments equivalent to thoso she is under obligation to make to the United States, and the British Government cannot accept the position in which this principle would be' only achievable upon a basis of tho full normal yield of the Dawes Annuities, or by taking at face value debts which cannot at present bo treated as good assets. Tho British Government already has consented not merely to reduce its claims against the Allies to the amount necessary to cover it 3 own payments in respect of the British war debt to the United States, but actually to apply tho ivholc of tho United Kingdom's share of German reparations to that purpose. This means that Britain not only takes to her own charge the whole of her own war damages, but also £800,000,000 of foreign securities devoted by her to tho general offort boforo tho United States entered the war.

France's Payments. In the application of tho Balfour Note to tho existing situation the Government, remembering tho intor-AlliCd debts wore' incurrod in a common cause, has been prepared to consider proposals undor ■which tho existing French dobt to Britain might be reducod provided the principle of dofinite payment by Franco from her own national resources is fixed, with duo regard to her relative wealth and ta*-paying capacity, and is assured without reference to reparutionß, Tho Government, therefore, expresses the opinion that it might be found convenient if French payments could be divided into, first, fixed annual amounts to be paid by France, irrespective of actual receipts from tho Dawcts annuities in any' particular year. ' Secondly, a further annual charge on the French share of the Dawes annuities., It, of course, is to be understood, first, that all counter-claims by France against Britain must be superseded, and, secondly, if and whon payments derived by Britain from European war debts and reparations are sufficient to provide a full discharge of British obligations to the United States over a full period, any surplus ia to bo used to diminish the burden of Britain's Allies. Tho Government hopes, if tho French Government iB prepared to inako proposals on the lines here suggested, that a settlement satisfactory to both countries may bo reached.

It is probable that M. Clemeatel, the French Finance Minister, will, visit America concerning war debts. It is believed that M. Herriot, Prime Minister, and M. Clementol, Minister of Finance, will shortly visit London relative to the Note.