The Timaru Herald MONDAY, JULY 11, 1932. FROM VERSAILLES TO LAUSANNE.

Timaru Herald, Volume CXXXVII, Issue 19231, 11 July 1932, Page 8

The Timaru Herald MONDAY, JULY 11, 1932. FROM VERSAILLES TO LAUSANNE.

For years the clashing of irresistible forces and immovable obstacles in the realm of national attitude to reparations and war debts, lias produced nothing but sparks of dissension. A Germany that cannot or will not pay reparations; a France that will not let up on Germany only if the United States lots np on the French debt; a United States Congress that firmly declares there would not be any more war-debt reductions; and a Britain and Italy who demand the wiping clean of the slate of all record of reparations and war debts. Such was the bewildering, problem that faced the Congress of Bowers at Lausanne. Early this year a reparations conference was convened, exactly two years after the Young Plan was consecrated within the ancient walls of the Binnenhof at The Hague, as a “permanent aud final reparations settlement.” World attention was attracted to the question of the striking coincidence that the President of the United States was signing the Congressional ratification of the Hoover Moratorium with a rider declaring against debt reduction, just as the news agencies were circulating the report from Basle of the Young Plan Advisory Committee declaring Germany could not go on paying reparations to the Allies after the expiry of the Hoover Moratorium on June 30. It remained for Senator Borah to say that “if Europe cannot see her way clear to end reparations and drastically cut armaments, the United States had better come out of Europe and stay out.” Generally, the people of the United States felt that they could leave Europe to sink or swim, according as the fates and its own sanity, or lack of it, determined without interference on the part of the people of the United States or the sacrifice of another American dollar. The march of world events, however, is slowly convincing national leaders and people that national isolation such as was desired by the United Slates is wholly a mistaken viewpoint and policy—impossible of pursuing to the end. Such a policy is short-sighted and provincial, and inimical to any cotPutry’s own ultimate interests agd economic, stability. Nevertheless, it is this attitude that has gained adherents in the United Slates since the announcement of the Hoover Moratorium; and only inspired leadership could stem the tide. On the other side of the Atlantic the French people vociferously acclaimed 31. Laval’s statement of policy in which he stated that “we shall consent to a revision of reparations only insofar as there is at least an equivalent reduction granted 11s in respect of our war debts.” Since the Reparations Commission, composed of Allied delegates ruled at Versailles in May, 1921, that Germany and her Allies were liable for approximately 6200 million sterling, Germany has been protesting she could not pay. Some instalments were paid, but Germany then defaulted. The Dawes Plan came in 192-1 and Germany paid the instalments for five years, although she had borrowed from foreign interests about as much as she paid. The Young Plan reduced Germany’s total liabilities to 600 million sterling, divided into two classes. The first were unconditional payments, covering reconstruction in Allied countries, and the second class, were conditional or postpouable payments which were designed to cover the debts of the Allies to the United States, and to terminate when their debts matured — that is in 1988. Since the Reparations Congress, however, Germany has incurred private debts amounting to 800 million sterling, but the Hoover 3loratorium provided for the suspension of reparations, and various “standstill” agreements with creditor countries' provided relief for Germany on private-debt service. The Basle report opened a new chapter in the history of reparations. It was pointed out that the reparations problem called “for concerted action which Governments alone can take.” Moreover, international statesmanship has become convinced that transfers from one country to another on a scale so large as to upset the balance of payments can only accentuate the present chaos. It is, moreover, realised that the release of a debtor country from a bin-den of payments which it is unable to bear may merely have the effect of transferring that burden to a creditor country, which, in its character as a debtor, it, in its turn may be unable to pay. In other words, if Germany does not pay reparations to France, then France will not be able to pay her debts to Britain and the United States! It remained for that great German newspaper, The Koelnische Zeitung, to say the other day that “a relaxation of the international situation emanating from France could perform miracles for Europe.” That relaxation has come at Lausanne, and reparations have been abolished, and it remains for the interested Parliaments to ratify the Lausanne agreement and then invite the United States to make a momentous gesture to the whole world by joining the Powers of Europe in wiping the slate clean of war