THE New Zealand Herald AND DAILY SOUTHERN CROSS. WEDNESDAY, DECEMBER 13, 1922. BREAKDOWN IN LONDON.

New Zealand Herald, Volume LIX, Issue 18272, 13 December 1922, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS. WEDNESDAY, DECEMBER 13, 1922. BREAKDOWN IN LONDON.

Conference follows conference in the endeavour to compose Allied differences and German difficulties over the question of reparations. Out of the never-ending series of complications it is hard to deduce much beyond the apparent impossibility of meeting French insistence on payment and simultaneously finding a formula acceptable to any Government which can' function in Germany. A change of Government in Britain and in Germany does not seem to have removed any of the difficulties. It is true that the present conference is merely adjourned to meet again early in the New Year. There is not much question, however, that the difference between adjournment and breakdown is so small as tp be practically negligible. French comment, the demand for immediate action, shows a practical realisation of that situation. The other point of special interest is that despite the absence of Mr. Lloyd George from the deliberations, French and British differences ha,ve not disappeared. French opinion seems seriously disturbed at discovering very little modification of policy with Mr. Bonar Law at the conference table in place of the former Prime Minister. It was always difficult to accept the view which invested Mr. Lloyd George with sole responsibility for the recurring crises following the peace treaties. He himself said he would watch with interest the methods adopted by his successors to compose the differences which they utilised in no small measure against him. Both in the Near East and in. the latest conference over reparations the situation at which he hinted has come to pass. The methods adopted by him made it" temptingly easy to cast most of the blame upon him. Now he is free from the responsibility it has become evident that mishandling of the situation was not the sole cause of failure in either case.

The present meeting is the logical sequel of the solution arrived at in August last, when it seemed probable, not only that France would pursue an active policy against Germany, but also that inter-Allied accord would be irreparably broken. The arrangement then made, by the Reparations Commission, was for a suspension of cash payments to the end of the year. Belgium, the recipient in this particular case, agreed to take German six-month Treasury Bills in lieu of cash. The temporary solution necessarily involved no more than a postponement of the problem to the beginning of the year. France, bent upon

imposing' sanctions by the expulsion ; of Germans from occupied territory, and by the sequestration of bank accounts, was induced to stay her hand. Now when the question has presented itself again, all the old difficulties have recurred. In the interval, Germany was to have evolved a plan acceptable to the Allies. Failure has signalised the effort. The one thing upon which Britain, France and Italy appear to have agreed is the inadequacy of the German offer. On the issue of taking immediate action by occupying the Euhr region, they have disagreed absolutely. In this Mr. Bonar Law adopts an attitude similar to that, taken by Mr. Lloyd George, to the mingled astonishment and indignation of French opinion. The more conferences there are upon this most difficult legacy from the Peace Treaty, the more do the parties concerned seem to be moving in a circle. Germany pleads poverty, France stands firm upon the determination to demand payment, and to enforce, sanctions in case of default. Britain, on this as on some other occasions, supported by Italy, favours granting a breathing space before cash payments are insisted upon. The London conference, unfortunately, discloses no more hopeful features than those which preceded it. The melancholy side of the successive breakdowns is that so much hinges upon a satisfactory settlement. The perpetual irritation caused by disagreement between Britain and France needs no emphasising. It has been one of the most disquieting characteristics of the after-war period. Stabilisation of German currency, the industrial recovery of much of Europe, depends in a large degree upon a solution of the problem of debts and reparations. With this the commercial prosperity of Britain is nearly concerned. France, heavily committed to expenditure for the repair of devastated regions, looks to Germany for the means to meet tho bills so incurred. No French Government, it is contended, dares to suggest any relaxation of the demand. Thus on the one hand Britain and Franco find their future mortgaged to a settlement of some kind. There have been warnings, on the other hand, that the exertion of too heavy a pressure upon Germany will create a gra\e peril, rendering probable complete commercial, social ard political chaos, with possible reaction throughout the Western world. America, the financial colossus of to-day, is supposed to be awaiting a settlement before offering to co-operate in rehabilitating Europe. All these things are involved in agreement over reparations, yet so great ave the obstacles that the latest of a long line of conferences seems to be going the way of its predecessors.