THE NEXT STEPS

Evening Post, Volume CXXI, Issue 146, 22 June 1936, Page 9

THE NEXT STEPS

LEAGUE AND SANCTIONS END ANTICIPATED REFORM OF THE COVENANT DOUBTS ABOUT NATIONAL RELATIONS United Press Association—By Electric Tolo--1 graph—Copyright. (Received June 22, 11.50 a.m. ) I LONDON, June 21. i The "Observer" anticipates that the League Assembly will approve the | lifting of sanctions on June 30, after which the actual abrogation ivill be • only a matter of a few days. The League's next step will be the reform of the Covenant and removal of defects revealed in the operation of i sanctions. This will be a long process. Britain, it is stated, is not making . proposal.-! until German participation in the negotiations is certain, and accordingly it is considered that an early reply to the British Note is essential, but Berlin is in no hurry about the matter, insisting that Germany must first know the future relations with Italy, whose active cooperation is imperative for a settle-j ment. Meanwhile British Government departments, including the Foreign Office, are drafting memoranda to facilitate the preparation of the British memorandum. A LOAN TO ITALY? While the city recognises that the

termination of sanctions is an accomplished fact, opinio:, is divided regarding the advisability of a loan to Italy to develop Abyssinia, as some financiers are already urging. Mr. Neville Chamberlain's warning that the time is not ripe for the resumption of foreign investments is taken as an indication of the Government view that there is no doubt a loan would be highly unpopular with the country, as even a number of Conservatives consider the Government already has gone too [ far in condonation of Italian aggres-1 sion. Many city business men, however, I urge that Italy's economic position is so j bad that only an extension of credits would enable resumtpion of normal trade. Italian policy will probably concentrate on buying from those countries to which she sells most. Lack of foreign exchange is likely to lead Italy to intensify her efforts to increase her exports and strive to maintain the speeding up of the production of manufactures achieved during sanctions, as a result of which purchases of manufactures from other countries will pro-1 bably be permanently less. Italy's greatest need is raw materials, especially wool. It may be some time before she operates on the British colonial markets to any considerable extent, but for the time being she is likely to be an irregular buyer in accordance with the exchange position.