THE New Zealand Herald AND DAILY SOUTHERN CROSS. MONDAY, JULY 28, 1924. THE LONDON CONFERENCE.

New Zealand Herald, Volume LXI, Issue 18772, 28 July 1924, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS. MONDAY, JULY 28, 1924. THE LONDON CONFERENCE.

The London Conference has developed in many ways, as was to bo expected. Its aims are numerous and complicated, The Dawes report, the basis of all discussion, did not pretend to be a formula ready for instant application. It was, rather, a series of suggestions advanced in the hope' that their execution by the AJlies would provide the way out of a situation which, it was generally agreed, could not be left longer untended. Yet with all £he advantage of anticipatory goodwill, and the considered concluuiong of expert investigators, th' 3 task of the conference was in no sense a light one to approach. It was to retain a definite assurance thatfcreparations would be paid,, while at the same time giving Germany a chance of regaining economio stability—all this to be simultaneous with the reconciliation of;; divergent views among the assembled Allied Powers. There has been no lack of conferences since the Treaty of 4 Versailles was signed. For a time they followed one another with such monotonous regularity, concluded without producing any change in the situation so inevitably, that the announcement of a new one was liable to be received with cynical indifference. Sometimes all the Allies were represented. At others Britain and France met to grapple with difficulties they had in common, Or disagreements which did not promise to be settled by correspondence. Sensational reports that the long-established Entente between the two neighbouring nations was being destroyed appeared so frequently that the first edge of alarm aroused by them was speedily blunted. Through the whole series the feeling that no settlement was possible unless the United States cooperated was so well founded that few ventured to hope for much result firom the interminable discussions. At the meeting now in session, some of the features promising failure from the outset have been eliminated. There is no suggestion of Britain; and France facing one artother, 'f manoeuvring for position. Representatives of the United States are there. With all the advantages, including the' hopeful text of the Dawes and McSenna reports, it is very evident that fundamental difficulties have still to be overcome. No sooner were the reports of the expert commissions published, than .there wj&s raised the question whether effect could be given them without varying or amending the Treaty of Versailles. On that pointthere has already been much trouble at the London Conference. The French delegates are not in a happy position. They have to negotiate always with one ear open for manifestations of public opinion in their own country. The whole subject of reparations, sanctions, and above all, national security, has been made a popular issue in France to such an extent that no representative of the nation can make easy concessions for fear of consequences, Policies have been shaped upon the issue, elections fought on it. The French public has been taught to believe that any variation of the Treaty would involve loss oi: that which victory should have .assured; the occupation of the Ruhr was fully authorised by the terms of the document.; withdrawal before all past obligations had been fully met, and future ones absolutely secured, would be a betrayal of the nation. Opinions so sedulously fostered cannot be readily disregarded, Therefore it is not surprising to find the French questioning every portion of the Dawes report which can even 'be suspected of involving a variation of the Treaty of Versailles. The suggestion that Germany's promise should be the signal for evacuation of the Ruhr is naturally a difficulty when for so long it was insisted that performance of obligations—and complete performance at thitt—must be the only condition precedent to relaxing the grip upon occupied territory. That attitude has naturally come into direct conflict with the views of those bankers who have been consulted relative to the providing of credits for Germany. The financial leaders have been asked to approve, practically to promise, a loan of £40,000,000 to Germany. Even in these days when millions are mentioned with as much ease as thousands once were, this is

no small figure. International 1 financiers cannot give off-hand assurances about sums of that size without being satisfied their advice is sound. Yet, because the bankers have hesitated, signs of indignation have been shown in France.

So" long as sanctions are provided for enforcement upon Germany in the event of default, there is a danger of their application damaging the national credit. The bankers, with the example of the Ruhr palpably in their minds, have asked for guarantees against such an eventuality. It is this which has made France charge the bankers with entering the field of politics. Yet the great financiers engaged on the problem carry a heavy responsibility. It is on their recommendation, and for the most part solely because of their approval, that i'money will be invested in»any Gejpan loan floated. If they ask for guarantees against happenings they ; think may make the investment too great a risk, they are taking a precaution demonstrably financial, whatever its political flavour as well. They have their duty toward their clients. Mr. J. P. Morgan has put the position briefly and clearly when he says: " As bankers we should not ask the American investor to buy German bonds unless and until the Allies in their own time, for their own reasons, have determined upon a policy which will, in our opinion, secure the bondholders." He adds that if such an assurance can be given most of the questions before the conference will answer themselves. The demand, surely, is not;, unreasonable. It is stipulated that the security shall be proved good before investment can be advised. It is left to the Allies to say how and when the result is to be obtained. Such a summing up simplifies the situation. An external loan is considered essential to the application of those recommendations made by the investigating commissions. The bankers are prepared to smooth the way to raising one when they are satisfied the investment has been made safe. It is left to the AP T es in conference to formulate conditions which will satisfy the bankers. There is the point where international politics enter. However, it is the task of the envoys in conference to stgree about them if possible. The responsibility of failure cannot rest upon the bankers, if the London Conference fails.