FOREIGN AFFAIRS

Dominion, Volume 22, Issue 79, 27 December 1928, Page 10

FOREIGN AFFAIRS

LUGANO CONFERENCE AND PARIS NEGOTIATIONS A FORWARD STEP MADE The Conference at Lugano did not open with much promise of success, and little was expected of it, unless the Towers concerned altered their attitude towards each other, and also to the twin problem of evacuations mid reparations. Fortunately they did this, and in consequence the negotiations proceeding concurrently in Taris proved to be successful up to a point (writes H.C.J.). Evacuations. Undoubtedly the presence of 60,000 British, French, and Belgian troops in, the Rhineland ten years after, the Wails an anachronism. At the September meeting of the Powers at Geneva Germany made, a demand for the evaluation of the Rhine territory as of right. This attitude may or may not be justified on legal grounds. It is an open question which can be debated on that score, but the position between France and Germany was certainly, not improved by the method of advance. The French mind at once harked back to 1870, and then it was recalled that Germany remained in occupation of France until the whole of the reparations imposed had been paid. The Locarno spirit does not thrive alongside such awakened memories. France became obdurate on the point that both reparations and evacuations must be considered together. For France the emphasis is on the subject of reparations payments. At Lugarno this subject took front place. French diplomacy has, therefore, won its point here. Reparations. The saying is credited to M. Jacques Seydoux that .“there are no political questions: there are only economic problems”—in other words, if one looks deep enough an economic cause is to be found in all political problems. There is a great deal of truth in this assertion, and it is of especial application to any problem which concerns France. “French logic” consists of asking the question, “What are we going to get out of it?” Such a mentality is likely to keep the reparations question to the forefront, and in dealing with it to maintain the interests of France before all else. Such a predisposition would naturally set the trend of French opinion against the handing over of this subject to a committee of experts free from Government control. The German viewpoint, however, Ims been that the problem of Germany’s ability to pay is not. a matter in which the internal politics of France should be permitted to obtrude. Germany wanted a committee of independent experts to examine its economic machine and to determine tire amount of financial strain it is capable of bearing. Britain favoured the German viewpoint. At Lugano this view has prevailed. France has conceded the independence of experts from governmental control. This, therefore, constitutes a success achieved byTlerr Stresemann. The committee about to be set up will function somewhat similarly to the Dawes Committee. America’s Changed Attitude. America’s obdurate attitude of not touching the reparations problem shows signs of weakening. This was to be expected. Again the stress of economic facts has broken down the political factor. As a matter of fact, America Is too Interested already in Germany as a direct debtor to her to be indifferent to that country’s fate. The interests of the American investor ill Germany are now considerable. Germany was America’s second largest foreign borrower in 1927. Canada took first place with £53,666,000, Germany’s borrowings of new nominal capital being £44,013,000. It is the investor’s interest which brings about American concern in the reparations question. The “New York Journal of Commerce” remarked in November: “A solution of the reparations question is of utmost importance to those in the United States who have placed large amounts of funds in German securities, and who have been 'chiefly responsible for the rapid recuperation of German economy. .. the American investor, and especially the American investment houses, which have brought out German issues, ought to insist that no settlement be made which would ultimately jeopardise the interests of the American bondholders.” The “Washington News,” concurring, said : “That this country will sooner or later participate in a new agreement on reparations there is little doubt. Nor is there any reason why it should hold aloof. Technically correct though Washington officials doubtless are in their contention we have nothing whatever to do with reparations, the fact remains that no nation,on earth is actually more vitally interested than America. Our war debt settlements with the Allied nations are every one based on capacity to pay, and capacity to pay largely depends upon how much Germany: pays the Allies. It is to our interest to solve the war debts and reparations problems. The two are connected in fact if not in law.”

The foregoing considerations have brought about a modification of the American President’s previous attitude lie having now consented to the appointment of American economic experts on the new Committee of Investigation. This is all to the good, and helps very much in clearing the way for further progress. Herr Streseman’s Position. - The agreement reached nt Paris concerning the new Reparations Committee should do much to strengthen Herr Streseman’s position in Germany. After his return empty-handed from Lugano, the Nationalist newspapers naturally belaboured him for his seeming failure. The “Deutsche Zeitung” considered him to lie “politically dead, having sacrificed Germany to a policy of bottomless illusions.” Recent events, however, have falsified this and similar prophecies. The pacific element in Germany will therefore receive a great addition in prestige and power by reason of recent events,' which makes the outlook in Europe certainly more promising than it has been for a long time,