THE New Zealand Herald AND DAILY SOUTHERN CROSS THURSDAY, JANUARY 21, 1932. WASHINGTON AND LAUSANNE.

New Zealand Herald, Volume LXIX, Issue 21086, 21 January 1932, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS THURSDAY, JANUARY 21, 1932. WASHINGTON AND LAUSANNE.

The suggestion that the Lausanne | Conference will be made superfluous by certain diplomatic agreements beforehand ought not to be acceptable. It points the wrong way. These agreements amount to no more than the granting to Germany of a renewed moratorium for six or i twelve months from the expiry of the present arrangement in July, and mean merely a side-stepping of the problem and a trusting to luck as to what may have to be done after this renewal. This would be to divert the conference from its original purpose. To make of it a mere meeting to enter a new date on an international document is a decision unworthy of serious statesmanship. What are the simple and plain factii of the situation 1 Germany claims that she has no alternative to default in reparation payments and no prospect of meeting her obligations under the Young Plan. This claim is in accordance with the forecast of many expert and reputable economists, and has support in what is said by impartial observers of her financial circumstances. The reported agreement between Britain and France as to a renewal of the moratorium is obviously based on the known truth of the claim. In the semi-official statement issued by the United States there is a similar assumption. The German announcement goes further than a request for more time to pay: it says that there is no prospect of ability to pay. France is making much of the rights and wrongs of the position. That way of looking at things has doubtful relevancy. To get at the facts, all the facts, those that exist in the incidence of the whole problem of reparation payments and war debts as nations other tha:i Germany arc experiencing them, is the business needing to be done. The expedient of postponement is insufficient to bring real relief, either to Germany or to these other nations. When the Hoover moratorium was proposed it was rightly welcomed, not only for its immediate benefit but also because it raised a hope that some "scaling down" if not total removal of the worldwide burden would thus be hastened. To dash that hope, by doing now no more than put off the evil day a little longer, is to leave a lurking, crippling uneasiness. What the nations are more or less articulately asking is to have this thing boldly faced without delay, that they may know where they are and get back to normal business. As the precise terms of the AngloFrench agreement are not published, and are not likely to be, interest centres in the statement issued by the United States. Certain points in it call for note. It is associated with the intimation that Mr. Stimson, not Mr. Dawes, will lead the American delegation at the Disarmament Conference at Geneva, which is to open immediately after the Lausanne meeting, and that the American attitude to the reparations problem is related to the question of disarmament. This significant linking of the two subjects is in accordance with Mr. Hoover's original handling of the reparations question when proposing the moratorium. The United States, he said, made this approach to the European nations on the condition that they would do their utmost to advance disarmament. Will that cause be advanced by mere paltering with the economic issues that are a cause of vexation in Europe now to a greater extent than they were when the Hoover moratorium was accepted 1 Nothing would clear the way for the Disarmament Conference like a resolute facing of the reparations and war-deb ts problem ; and Washington, regarding this as one for Europe';? handling now, at least hints that this should be done. Although the United States will take no part in the negotiations at Lausanne, the American delegation will be "influential" at Geneva. But America,n influence at the Disarmament Conference, however powerfully exercised, will accomplish little among nations in Europe confessedly so distrustful of each other that they cannot boldly face together the besetting financial problem at the bottom of their economic troubles. Weakness at Lausanne will endanger success at Geneva. Of more direct significance is the answer given by the United States to European overtures seeking advice concerning war debts: Europe must work out its own plan, but the United States "will carefully consider any concrete plan proposed for the further postponing of wardebt payments or other concrete arrangements to meet the present emergency." This is direct encouragement to use the opportunity of Lausanne for more than the mere registration of an arrangement further postponing Germany's payments and drawing up a schedule of corresponding relief to be vouchsafed by America to her debtors. The "present emergency" is much more than a need to extend clemency to Germany, and incidentally to safeguard the economic interests of all Europe, for a matter of months. Germany has intimated that her plight is so dire that such a postponement will be worth little —she must default even twelve months after July if there be nothing more than that. As plainly as can be said in view of the earlier American disavowal of willingness to consider reduction or cancellation, Washington has invited Europe to submit far-reaching proposals. For this semi-official outline of the American attitude" there is significant support in the comments of the American press. German default is accepted as a likely possibility, and the American taxpayer is counselled "to grin and bear it," while any temporary compromise at Lausanne is described as running away from the problem until it catches up with the nations again in a worse form. That view of the matter should. eve% at the eleventh hour, commend itself to Europe,