PAYMENT OF WAR DEBTS.

New Zealand Herald, Volume LXII, Issue 19060, 3 July 1925, Page 9

PAYMENT OF WAR DEBTS.

FRANCE ANI) AMERICA. BRITAIN'S EQUAL CLAIMS. FRESH NOTE SENT TO PARIS. By Tcle.ir.-iph—Press Association—Copyncht. (Received 9.5 p.m.) A. and N.Z. LONDON. July 2. It is announced from Paris that a new British Note has been received by the French Government concerning France's war debts. The news has como as a complete surprise to (he British press and public. It is stated that the Note reasserts the main contents of that despatched to Paris on February 7. It adds that Britain has no intention ,of intervening in the discussions between France and America, but at the same timo the British Government maintains it is entitled to terms of equality with the United States. The Note concludes: "Britain considers that France should make an offer, oven if it he a provisional one.'' The news of the receipt of the Note was distributed by the Havas agency. The message stated: "The British Government has sent another memorandum to the various debtor States setting out the British view regarding the settlement of inter-Allied debts. Concerning France, tho Note says in effect that if Franco signs an agreement with the United States to pay part of her debt, then Britain will expect a proportional payment of tho sums which France owes to Britain." The British Note of February 7 to France in regard to war debts stated that the Government adhered to the principle of the Balfour Note, but Lord Curzon's Noto of August 11, 1523, referring to the late Mr. Bonar Law's proposals of January, 1923, was clearly no longer applicable to the existing facts of the situation. It was written before the framing of the Dawes plan, and on the assumption that the German liability would be fixed at a figure less than that adopted in the Dawes plan, and that bonds of the kind contemplated 'in Mr. Bonar Law's plan were to be issued, These assumptions were no longer tenable. The Note proceeded:—"The principle of tho Balfour Note is that Britain shall receive from Europe payments equivalent to those she is under an obligation to make to the United States. The Government cannot accept a position in which this principle is only achievable upon the basis of the full normal yield of the Dawes annuities, or by taking at face value debts which cannot at present bo treated as good assets. The Government has already consented not merely to reduce Britain's claims against the Allies to an amount necessary to'cover her own payments in respect of the British war debt to the United States, but actually to apply tho whole share of the United Kingdom in German reparations to that purpose. This means that Britain not only takes to her own charge the whole of her own war damages, but also the £800,000,000 of foreign securities devoted by her to the general effort before tho United States entered the war. In the application of the Balfour Note to the existing situation, the Government, remembering that the inter-Allied debts were incurred in a common cause, has been prepared to consider proposals under which the existing French debt to Britain will be reduced, provided tho principle of a definite payment by France from her own national resources is fixed, with due regard to her relative wealth and taxpaying capacity, and is assured without reference to reparation. The Government, therefore, expresses the opinion that it might be found convenient for French payments to be divided into, firstly, fixed annual amounts to be paid by France, irrespective of actual receipts from the Dawes annuities in any particular year; secondly, a further annual charge on the French share of the Dawes annuities. It is, of course, to be understood, firstly, that counter-claims by France against Britain must be superseded; and secondly, if and when payments derived by Britain from European war debts and reparations are sufficient to provide for tho full discharge of British obligations to the United States, over the full period of such obligations, including payments already made, any surplus is to ho used to diminish the burden on Britain's allies. The Government hopes that if the French Government is propared to work on the lines here suggested, a settlement satisfactory to both countries might be reached."