FRANCE’S DECISION NOT TO PAY

Dominion, Volume 26, Issue 70, 15 December 1932, Page 9

FRANCE’S DECISION NOT TO PAY

Chamber of Deputies Rejects Herriot’s Proposal TO-DAY’S INSTALMENT OF WAR DEBT United States Faces Complicated Situation By a vote of 402 to 187, the French Chamber of Deputies rejected the Herriot Government’s proposal to pay with reservations the instalment of War debt to the United States due to-day. The Government thereupon resigned. Belgium also has decided to make default, on the ground, that it is impossible to pay owing to being deprived of reparations. It is believed that Poland will follow suit. Italy, according to a recent decision of the Fascist Grand Council, will pay to-day’s instalment but no more. Britain, the largest creditor, will pay to-day, but will treat it as a capital payment, of which account should be taken in any final settlement. Washington officials admit that the fall of the Herriot Government has further complicated the situation.

DRAMATIC SCENES Debate in Chamber of Deputies HERRIOT’S DEFEAT (By Telegraph.—Press Assn.—Copyright.) (Received, Dec. 14, 7.50 p.m.) Paris, Dec. 14.. Dramatic scenes were witnessed in the Chamber of Deputies last night during a debate on the Government’s proposal to pay with reservations the instalment of war debt to America due on Thursday. The debate ended with rejection of the proposal, whereupon the Government resigned. The Finance and Foreign Affairs Committees’ vote rejecting any form of payment in December sealed M. Herriot’s fate, and the Debt Commission passed a death sentence after hearing from his own lips the text of his American Note. M. Louis Marin, Leader of the Right, opened the bombardment in the Chamber with a speech against payment. “America’s Double Policy.” Deputies loudly applauded allegations as to America’s double policy, consisting of intervening in Europe when her interests in Europe required her to do so and then withdrawing when she encountered a disagreeable responsibility. Many speakers alleged that the real motive behind the Hoover Moratorium was the interests of private American creditors whose money was locked up in Germany. Speaker after speaker argued that debt payments were no longer morally justified, since they were no longer covered by Germany. The Chamber was still sitting at 4 o'clock in the morning when M. Herriot rose to make a final appeal to Deputies to accept the Government’s decision to pay, with reservations. A Telling Point. One of the most telling speeches during the debate was that of a Conservative Deputy, stressing the point that a creditor who by his action prevented a debtor from fulfilling his engagement thereby lost his right to exact executioji of that engagement. This allusion to President Hoover’s action in declaring a moratorium which deprived France of her credit on Germany and thereby of the means to pay her own debts, was greeted with an ovation by three-quarters of the Deputies. M. Chauvin, defending the Government, asked what the British people would think tb-morrow when they were told that France was paying neither America nor Britain. Was it certain that England would demand nothing from France? he asked. M. Herriot’s proposal was defeated by 402 votes to 187. The Government has resigned. M. Herriot declared that if France did not pay America, Great Britain could not long continue to pay without asking France to pay her. Exciting Scenes in Streets. While these scenes were in progress Inside the Chamber of Deputies, equally exciting events were proceeding outside. Mounted and foot police guarded all the. approaches, while crowds of Royalists and others demonstrated as close as possible, shouting, "Not a cent for America.” There were several clashes between the police and rioters. The latter threw paving stones at tramcars, tore up iron railings protecting trees in the boulevards and used them as weapons. When the police charged, a score of people were injured and hundreds were arrested. War veterans marched to the statue of George Washington and laid on it a wreath with an inscription against payment of the debt. NO PAYMENT TO-DAY Herriot’s Announcement (Received Dec. 14, 11.15 p.m.) London, Dec. 14. The British United Press correspondent at Paris says that M. Herriot announced that his defeaTed Government would not make the debt payment to America due to-morrow. OTHER DEBTORS Poland Unlikely to Pay BELGIUM WILL DEFAULT Paris, Dec. 13. The French Note announcing that America would be paid requested prompt revision of the system, the cost of which would be unbearable unless reparations were paid. The Belgian Cabinet announced that the American debt, the December instalment of which would be £425.000, was based on Belgium’s capacity to pay, but the moratorium under the Lausanne Agreement deprived her of essential receipts, therefore payment on December 15 was impossible. It is understood that Poland, whose Instalment is £860,000. is unlikely to pay America.

NEW BRITISH NOTE Explanation of Position Taken Up A RIGHT RESERVED Official Wireless Rugby, Dec. 13. A Cabinet meeting was held this i iorning to consider the terms of a further Note on the war debt to be sent to the United States Government The terms of the Note follow:— "In replying to the Note of the American Government of December 11, his Majesty’s Government desires to emphasise that the purpose of its Note of even date was to state clearly its o- i position in regard to the payment of December 15, and to explain the circumstances in which it had decided to make that payment. "It was not of course the intention of its Note to touch upon a matter affecting the constitutional position of tl _■ United States Government. The British Government’s Note should therefore be read solely as relating to its own position, which it has taken after mature consideration, namely, that It is prepared to make payment on December 15 in the light of the considerations set out in its Note of December 11, and it must reserve the right to revert to those considerations in the examination of the whole question to which the United States Government has agreed. It would again emphasise the Importance of entering upon that examination without loss of time.” NO REPLY TO BE SENT Mutual Understanding “NEGOTIATIONS CLOSED” (Received Dec. 14, 7.50 p.m.) Washington, Dec. 13. The United States will send no reply to the latest British Note, which was received to-day. After repeated conferences of President Hoover, Mr. H. L. Stimson, Secretary of State, and Mr. Ogdeu Mills, Secretary of the Treasury, the impression in informed quarters was distinctly that Britain and the United States now understand each other’s position, and no reason is seen in official circles for the United States to reject the payment expected on Thursday. Mr. Stimson said: “The negotiations with the British Government are closed so far as concern the December 15 payment. I do not anticipate that a reply will be necessary to ‘to-day's Note.” The British Note explained that the Government in Sunday's Note had intended to explain the circumstances under which it was decided to make payment, and hftd not intended to “touch upon any matter affecting the constitutional position of the United States,” but asserted that Britain “must reserve the right to revert” to those considerations which she set forth. There is no quarrel here with this aim. The Administration does not believe that the claim later to be made will prove a complicated one, because so many larger questions will be at issue in a revision. The negotiations are now generally regarded as a matter, so far as Brita’n is concerned, in the hands of the Presi-dent-elect, Mr. F. D. Roosevelt. It is not belieced that negotiations for revision can possibly be sarted before March 4. President Hoover is preparing a special Note to Congress on foreign affairs, and is now awaiting possible defaults. He is ignoring M. Herriot’s attacks in the French Chamber of Deputies, apparently considering that they were uttered more for local consumption in France than for foreign ears. It is conceded that the possibility of default by other countries besides Belgium would break the “united front,” but would not contribute to easy approach to the problem of revision. Meanwhile officials express considerable concern at the decision of the Belgian Cabinet to make default, and admit that the fall of the Herriot Cabinet in France Will further complicate too situation. Routine Debt Note answers have been delivered to the Belgian Ambassador and the Cecho-slovakian Minister. They used the same phraseology, and denied a suspension of current payments. Attack on President. What had hitherto been a sporadic debate on the debt question in Congress took a dramatic turn when Representative McFadden (Republican) introduced a resolution for the impeachment of President Hoover and specifically charged him witli “high crimes andmisdemeanors” chiefly in connection with the war debts arrangements. Mr. Hoover was also charged that he had appointed Mr. A. Mellon Ambassador to Britain while he was under a resolution charging impeachment. Mr. McFadden denounced Mr. Hoover’s handling of the Bonus Army and said that the President had usurped the powers of Congress in proclaiming the debts moratorium. He contended that this action had led to the present situation, involving the United States and foreign debtors. The resolution was rejected by 361 votes to 8.

Mr. McFadden has long been a foe of the Administration. Pennsylvania Republicans in the House later demanded the resignation of Mr. McFadden as secretary of their delegation. Roosevelt Denies a Report. In Albany, Mr. Roosevelt took occasion categorically to deny a reported interview with the London “Daily Express,” saying he would urge the waiving of interest on the debt when he was inaugurated as President. He denounced the interview as “made out of white cloth” and said it was very embarrassing. CREDIT STANDS HIGH British Attitude Praised (Received Dec. 14, 10.55 p.m.). New York, Dec. 14. The New York “Herald-Tribune,” in a leader, praises Britain’s latest Note. “The long debate with Britain is over and payment ended in a fashion which we are' confident will in the long run count heavily for mutual understanding and friendship between the two great English-speaking nations," it says. “We welcome it and congratulate the spokesmen of both Governments. . “The result is that English credit stands in American eyes at the high point which has been its tradition and boast. The consequence in this country in our opinion, is that sentiment will be strong for leniency and generosity toward a debtor so careful of its honour.” DEBTS TO AND FROM Britain’s Position Stated RELATION TO LAUSANNE Official Wireless. Rugby, Dec. 13. A statement regarding war debt payments and their relation to the Lausanne Agreement was made in the House of Commons to-day by the Chancellor of the Exchequer, Mr. Neville Chamberlain. He was asked by Mr. Winston Churchill for an assurance that the Government would in ho cir-

curastances consent to a preferential discrimination of France and Italy in favour of their war debt payments to the United States as against their payments of similar debts due to Britain and whether he would demand equality and simultaneity of treatment for Britain from these two countries in order to prevent all payments by all countries to the United States on December 15 being made at the sole expense of Great Britain. Replying, Mr. Chamberlain said that a letter which he had addressed to the French Finance Minister at Lausanne in July, 1932, stated that the United Kingdom Government would have been glad, if it had been possible, to cancel the French war debt as part of an allround cancellation, but in the actual circumstances it could not enter into any definite commitments modifying the existing war debt funding agreement. It agreed, however, that the annuities due under the agreement should be suspended until the coming into force of the Lausanne Agreement or until it had been decided not to ratify it. The British Government earnestly trusted that the examination of the whole question of war debts in their relation to world recovery which the United States Government had agreed to would result in a settlement which would enable the Lausanne Agreements to be ratified. In the meantime, the British Government considered it of the utmost importance that no decision should be taken at present to the effect that the Lausanne Agreement could not be ratified. Consequently, assuming that this view was concurred in by the other Governments concerned, the suspension of reparations and war debts would remain in force, but ail rights of the British Government under existing agreements would lie integrally reserved. Answering a supplementary question as to whether France had agreed to pay Britain £l2, million a year irrespective of payments from Germany, the Chancellor of the Exchequer said that the agreement with France provided that payments were due to Britain quite irrespective of any payments received from Germany by France. He also stated that there was nothing incompatible between the American willingness to consider revision of war debts with a view to the world’s recovery and the arrangement made at Lausanne which, in his opinion, was an essential preliminary. “We are entitled and wo intend, if so able to make a separate settlement with the United States,’’ he added. PAYMENTS DUE America’s Principal Debtors The payments due by the principal war debtors of the United States for the year 1932-33 are as follow:— Dollars. Great Britain 171,500.000 France 60.000.000 Italy 14,791.000 Belgium 8.250,000 Poland 0,627,000