"STILL UNCRACKED"

Evening Post, Volume CXV, Issue 106, 8 May 1933, Page 6

"STILL UNCRACKED"

Mr. Mac Donald's report to -..the House of Commons on the results of his visit to Washington added very little, if anything, to our'knowledge of the subject, and its studiously restrained tone suggests a desire to discount any extravagant expectations. The concluding words were:— As for the visit as a whole, while I wish to convey no exaggerated impression, I would say with confidence that the mutual understanding between ourselves and the American Government has been materially improved by the discussions which I have had with the President, for whoso friendly hospitality and unreserved helpfulness throughout all our deliberations the warmest thanks of the Government are due. It is certain that "no exaggerated impression" of confidence could be derived from the statement itself. The conversations had dealt with the problems to be brought up at the Economic Conference, which included tariffs, quotas, exchange control and stability of international currency, and the frank discussion had "materially improved" the understanding between the two Governments concerned. To say this was not to say very much, and. it said nothing of what from the British standpoint has commonly been regarded as the capital problem. On December I—ra fortnight before the last pay-day— the disastrous effect of the war debt payments upon the debtor, the creditor, and the whole world was the subject of a masterly Note which was presented at Washington by the British Government. Britain's instalment was nevertheless paid on the due date, but the payment was made under protest, and with the intimation that it would be the last. Though another instalment falls due next month, the subject was not even mentioned in the Prime Minister's statement. As Leader of the Opposition, Mr. Lansbury had good cause for complaint in Mr. Mac Donald's reticence. It was only in answer to a, question that the information was elicited that war debts would not be discussed at the World Economic Conference, and that on this point no understanding had been reached at Washington. How is it that, with this vital issue deadlocked, the opening.of the Conference has been fixed for June 12, just three days before the war debt instalments fall due, which Britain, France, and probably all the other debtor States will refuse to pay? This anticipation of the/next pay-day by so narrow a margin suggested that, though'the President. and the Prime Minister had reached rio formal understanding, .they unofficially saw some way past the snag which, on the face of it, threatened to wreck the Conference at the very outset. Either a compromise of some kind or other, which it was necessary for the present to leave indefinite, or an agreement to postpone the dangerous issue till the success of the Conference on the other issues had created a better atmosphere seemed to be the explanation of the position to which matters had been brought when Mr. Mac Donald left Washington. But in his broadcast speech he was more communicative than he was in his statement to the House of Commons. The "hard nut which was still uncracked" at the close of the conversations remains as it was, and a report from Washington today shows that President Roosevelt has had no better success with the Italian Finance Minister than he had with Mr. Mac Donald or M. Herriot. But Mr. Mac Donald's speech reports a definite agreement on an incidental point which is very far from encouraging. The World Conference will fail, he said, unless the debts are settled as early as possible—certainly before the termination of the Conference. President Roosevelt and myself are agreed upon that. Mr. Mac Donald was certainly wise to refrain from conveying any "exaggerated impression" of the progress made at Washington if the only agreement that he had up his sleeve was this agreement that the Economic Conference will fail unless an issue which these conversations have apparently not advanced a single inch, and which the Conference itself will not even discuss; is settled before it has completed its labours. Not exaggerated hopes but exaggerated fears are the danger to be guarded against after such an announcement as this. It is by far the worst news that we have had since America's abandonment of the gold standard scared M. Herriot into throwing up his hands in despair and excited grave fears in London for the success of Mr. Mac Donald's mission. The exclusion of the war debts from the Economic Conference is doubtless wise. The consent of the United States could not be expected to a Conference at which its representatives would be on one side, and those of all its debtors on the other, while the sympathies of the independent majority would inevitably be with those whom they regarded as the "under dogs." Outsiders would indeed .have had no logical place at such a conference, and as between debtor and creditor the individual conversations now in progress represent a far more businesslike procedure than a conference at which the debtors would present a united front against their creditor. In insisting upon individual treatment of th«- war debts and, upon, theif exclu-

sion from the* Economic Conference, the United States has therefore done the right thing. Unfortunately, however, the differentiation of the treatment has not really separated the issues. A few months ago Mr. Chamberlain was strongly insisting that the war debt problems must be Settled independently of any bargaining over trade issues, while Mr. Roosevelt, then President-elect, took the opposite view. But, though different procedures have been 'adopted for the two sets of problems, the President and the Prime Minister are agreed that independent solutions are impossible. A settlement of the war debts might not be prevented by the failure of the Economic Conference, but the important point is that failure to settle the war debts will ensure the failure of the Conference. And just when this grave announcement is made the anxieties of the two leaders are increased by their Parliamentary embarrassments. On the eve of the Economic Conference Mr. Amery and other tariff diehards are seeking to wreck the Mac Donald Government, and the Democratic leaders of the American House of Representatives are reported today to be strongly opposed not only to cancellation or reduction of the war debts but even to a moratorium during the Economic Conference. If President Roosevelt's dictatorship was as complete as Signor Mussolini's he might be expected to find a way out, but the restiveness of Congress raises a very awkward problem.