FRENCH FINANCIAL CRISIS

Taranaki Daily News, 13 July 1929, Page 13

FRENCH FINANCIAL CRISIS

PAYMENT OF WAR DEBTS AGREEMENT STANDS TRIAL MUCH. HANGS IN BALANCE By Telegraph—Press Assn.—Copyright. Australian Press Association. Received July 12, 8.57 p.m. Paris, July 12. The Chamber of Deputies has commended the debate on ratification of the debt’ agreements, the result of which will vitally affect the affairs of Europe. M. Poincare spent hours of the broiling afternoon recapitulating the arguments' in favour of ratification. He declared every effort to obtain anything in the nature of reservations had met with refusal. It was certain no such clauses would be accepted either by Britain or the United States. If the agreements were not ratified claims would be made against France, particularly by England, while the Young plan itself would be threatened. M. Motto supported the Government and proposed that Parliament instead of discussing the agreements should empower the Government to ratify them. A laborious and dangerous debate will be avoided if the chamber can be induced to agree to this course. A French political crisis followed the Chamber’s recent reluctance to ratify unconditionally the debt agreements with Britain and the United States. Warnings that a refusal to ratify the debt agreements was tantamount to a declaration of national bankruptcy, and would probably lead to reprisals by the United States, were completely unheeded by the hotheads. ■ The Radical Party decided early in the month to vote in favour of the ratification of the debt agreements. That was. regarded as assuring M. Poincare of an adequate majority, in which event the question of the £80,000,000 owing to the United States for war material would also be satisfactorily disposed of. Shortly after the war America offered to sell France all the war material the United States then had in Europe for £80,000,000. France badly needed much of the material, therefore the Finance Minister concluded -what proved a bad bargain for France. America last month agreed to absorb this £80,000,000 into the Franco-American debt-funding agreement, known as the Mellon-Ber-enger agreement, provided France ratified the agreement by August 1. France wanted to see the Young plan adopted first, but America declined to wait. France faced another complication arising from the fact that under the London agreement of July, 1926, debt payments to Britain must not be inferior to those to America, therefore if France paid America £80,000,000 it must pay Britain a similar amount. The American Government refused the French Government’s request for a postponement of the payment of the £80,000,000.