WAR INDEBTEDNESS

Evening Star, Issue 20987, 29 December 1931, Page 7

WAR INDEBTEDNESS

FRANCE AND REPARATIONS THE BASLE REPORT Press Association—By Telegraph—Copyright. LONDON, December 28. The ‘ Daily Telegraph ’ says that Mr MacDonald personally sent a letter to M. Laval (French Prime Minister) suggesting that a meeting be held to discuss a common lino of policy for The Hague conference. When Sir Leith Ross, of the British Treasury, was recently in Paris he proposed that a five years’ moratorium bo grant to Germany, and that Franco should abandon her claim to reparations as an inducement to the United States to cancel the British and French debts. France’s counter-proposal was that the German moratorium should he for two years, adding that she could not see her way to give up her claim to reparations. Sir Leith Ross and the French officials, however, wore agreed on the urgent necessity of meeting the situation arising from the refusal of Congress to deal with war indebtedness.

In the Paris newspapers the outstanding topic is how the Basle Committee will view the attitude of Congress. They agree that the recommendations in the Basle report regarding a reduction of debts can be dismissed, as they are invalidated by the facts. The newspaper comments are thus concentrating on the assumption that the report virtually declares that Germany is bankrupt. ‘ Le Temps ’ agreed that a definite collapse in Germany may be serious, though it insists that Germany alone is responsible. The paper adds that the cost of reparations is only 12J per cent, of Germany’s total indebtedness, and that the rest is due to extravagance. ‘ L’lntransigeant ’ describes Germany’s financial methods as frankly dishonest, for by bankruptcy in 1923 she reduced her national debt to nothing, then borrowed abroad on shortterm credits, which she invested at long term. Thus, although-she is unable to repay her creditors she is now an enriched country, but she merely declares that she is insolvent and spits on her victims/

ALL EYES ON WASHINGTON LONDON, December 27. 'All the newspapers point out that the Basle report merely states what everybody knew, and tb „y express a fear that the issue will pass into the realm of political discussion at The Hague while the world’s problem intensifies. The • ‘ Daily Telegraph’s ’ diplomatic correspondent emphasises that the crucial point is: Can Germany be granted a further moratorium without the Powers ]■ owing whether they can obtain a corresponding suspension of their debts to America? Consequently all eyes are turned on Washington, awaiting President Hoover’s intentions.

CHIEF CAUSES OF WORLD CRISIS LONDON, December 28. The city editor of ‘ The Times ’ says; “ The markets are being resumed in the ho; o that French and American politicians will not disregard the Basle Committee’s warning. The instantaneous response to President Hoover’s moratorium offer showed that the public feels that war debts payments and the maldistribution of gold are the chief causes of the crisis.”—‘ Times ’ Cable.

M. LAVAL DENIES INVITATION

PARIS, December 28. (Received December 29, at 11 a.m.)

M. Laval denies that Mr MacDonald scut him an invitation to a meeting in London. He says that a meeting of the heads of Governments is only opportune when the reparation experts have completed their mission.

MR M‘FADDEN'B IDEA ISLANDS IN LIEU OF DEBTS. NEW YORK, December 28. (Received December 29, at 11.5 a.m.) Congressman M'Fadden, a fiery critic, who excoriated Mr Hoover, thinks it would bo a fine idea if France and Britain gave their colonial possessions adjacent to the American coastline in lieu of war debts. The islands of St. Pierre, Miquelon, and the Martinique group ho would take from France, and Honduras and British Guiana from Britain.

ENGLAND AND FRANCE NEARING A REPARATIONS AGREEMENT. LONDON, December 28. (Received December 29, at 11.30 a.m.) The ‘ Sun’s ’ special correspondent understands that England and France are nearing a reparations agreement in readiness for the international conference to enable granting Germany a general moratorium, to be followed immediately by America’s European debtors seeking a similar moratorium from America. The conference will probably take place at Geneva or Lausanne on January 20. America’s unyielding attitude has led England and Franco to overcome their three main differences. Franco forgoes insistence on priority of Germany’s commercial debts in the event of a further general moratorium. Franco further insists that the principle of the Young Plan should remain intact, on which Britain concedes. Britain wanted the forthcoming conference to negotiate a permanent agreement,; but is now; pre-

pared to agree to a provisional adjustment. The hasty convening of the conference will probably preclude direct representation by the dominions, but in the event of a general moratorium they will not be affected. It will he virtually a reopening of the Hoover Plan. Britain will similarly relieve the dominions of their Government debts to Britain. The next move would be for the European States to request the United States to concede a general moratorium. THE INTERNATIONAL CONFERENCE (British Official Wireless.) RUGBY, December 28. (Received December 29, at 11.30 a.m.) The date and venuo of the international Conference of Governments concerned in the reparations problem have still to he fixed. Meanwhile discussions on the technical issues that may arise aro proceeding between the French and English experts.

THE BASLE REPORT BRITISH PRESS COMMENT. (British Official Wireless.) RUGBY, December 28. (Received December 29, at 11.30 a.m.) Commenting on the Basle report, ‘The Times’ says: “Its very limitations only make plainer than ever the opportunity offered to statesmen of finding by a comparative effort some way out of the economic impasse. The experts’ careful statement leaves no room for doubting, firstly, that the economic gravity of the present crisis exceeds in magnitude the relatively short depression envisaged in the Young Plan; and, secondly, by the implication that in the present circumstances the German balance of payments will he unable to hear the strain of the reimposition of even the unconditional payments next summer. ’1

After examining the situation created by the withdrawal during the past year of foreign funds, and the fact that short-term credits are only being sustained under the “ standstill ” agreement, which is due to expire in February. ‘The Times’ says: “Unless Germany’s reparation liabilities are fixed at a figure to enable foreigners to lend with full confidence in her future, not only will she be unable to pay reparations, but will be forced to reduce economic activity to a very low level to the manifest detriment of the rest of the world. A mere moratorium, leaving the ultimate liabilities untouched, would simply lead to a still more dangerous crisis. That is why the British Government stressed strongly in its recent Note its desire for a permanent solution.” The ‘ Daily Telegraph ’ says: “Without stability the world cannot recapture prosperity, and as the first condition of stability a permanent financial settlement among the nations is essential. We may be justified in saying that the directors of the German economic policy have set themselves to create conditions in which the payment of obligations imposed upon her by her defeat in the war would be impossible, but that does not give us a means of exacting money. The duty of the Governments in the conference is to devise a scheme which will harmonise international debts .with present conditions.”

The ‘News-Chronicle’ says: “Until the whole question of Germany’s financial situation is satisfactorily dealt with, ordinary movements of capital between one country and another will not bo resumed. Trade will come to a standstill, and the financial paralysis from which the world is suffering will continue and intensify.