BRITAIN’S ATTITUDE.

Waikato Times, Volume 98, Issue 15313, 14 August 1923, Page 6

BRITAIN’S ATTITUDE.

RUHR OCCUPATION*

NOT AUTHORISED BY TREATY.

1871 NO PARALLEL,

Australian and N.Z. Cable Assn. LONDON, August 12. The following is the continuation of the British reply to the French and Belgian Governments on 'the question of German reparations and inter-allied debts. The British Government never concealed its view that Franco-Belgian action in occupying Ruhr was, quite apart, from expediency and want of sanction, not authorised by the treaty itself; but it would be willing that this or any other difference respecting the legal interpretation of the vital provisions of the treaty be automatically submitted to the Hague or other suitable arbitration. There is no inconsistency in the British Government refusing to acknowledge the legality of the occupation of Ruhr after joining in the presentation of the ultimatum and actually participating in the occupation of Dusseldorf, Duisberg and Ruhrort, In 1920. The action then -taken was never claimed to be in pursuance of the reparation clauses of the treaty. The Allies jointly decided -to threaten Germany with the occupation of further territory', just as they might have threatened a renewal of the war for failure to perform her treaty -obligations, some of which have no -connection with reparations. In the British Government’s view, it cannot legitimately be claimed that the measures which the, Allies under paragraph 18 of annex 11. -of the treaty are authorised to take include military occupation of territory. If -the Government has hitherto abstained from formally contesting the legality of the FrancoBelgian -occupation it has done so simply in conformity with Mr Bonar Law’s declaration at the Paris Conference in January -that -the Government desired to avoid causing needless embarrassment to the Allies. This cannot be made a reproach to the Government, which even now would not have taken up the question of legality had it not been challenged -to do so. Even if Britain joined in -the occupation, and passive resistance had never been started, it is not clear -how this wouid bring the problem -of reparations appreciably nearer solution. The Will and the Power. The French Government has now declared -that its object in entering Ruhr was not to secure prompt or complete payment of reparations, but to break Germany’s resistance and_ -to create the will on her part to pay, but the will to pay is useless without the power to pay, and Germany’s power to pay, in the -opinion of His Majesty’s Government, is likely to be rapidly diminished, and in the end extinguished altogether, by the continuation of the occupation, with its stranglehold on the most highly and delicately organised German industries.

No Parallel. The parallel .which the French Government -seeks to draw with German action in 1871 can hardly be sustained, for n-o similar authority can be cited in the case of Ruhr. The real analogy in the present -ease -is the occupation of the -left bank -of the Rhine. Further, it may be pointed out that -the recovery after the sh-ort campaign of 1870-71 -of an indemnity equal to four milliards of gold marks is not really comparable with the enforcement of a 33-fold -claim against a country financially exhausted by four years of strenuous warfare and a -blockade. The ease with which -the indemnity in 1871 was paid was largely the result of credit facilities which France was able to obtain. Germany, on the other hand, suffered from complete inability to obtain foreign -loans, largely because of long period which elapsed before the reparation liabilities were defined and the world-wide uncertainty regarding her ability to discharge them. It is yet fair to state, though His Majesty’s Government by no means is satisfied with -the performance, -that Germany in fact paid in respect of reparations in the cost of armies of oeeupation more than twice the amount exacted from France in 1871, as well as considerable s.ums in connection j;wifh -clearing offices and miscellaneous (treaty -obligations.

Evacuation of Ruhr.

The French Government is in error In attributing to His Majesty’s Government the suggestion that, simultaneously with advice to be given to Germany to abandon passive resistance in Ruhr, matters must be made to return I to normal conditions. The suggestion made in the British Note of July 20 was that proposals should be made for the restoration of Ruhr 'to conditions which would enable it to become an srea of fruitful production rather than one of international strife. The Government was surprised and disappointed at the French and Belgian Governments finding difficulties in agreeing lo so reasonable and advantageous a proceeding Although it was vaguely Intimated that Frence and Belgium may, when passive resistance ceased, consult as -to how it may he possible 4o lighten the burden in Ruhr, nolhtog tangible has been suggested which holds out any hope of the occupation being terminated, even when the avow- I ed object of breaking Germany’s will to resist has been obtained. His Majesty’s Government believed they were showing the fullest consideration to the position of France and Belgium, •» well as ensuring an effective guarantee of continued steady payments, when they suggested that the occupation would naturally terminate from the moment the guarantees were forthcoming. Pledges were less economically hurtful and would have been more effectively productive than ; the occupation of Ruhr had been. They need not have been acted upon until they were seen to be satisfactorily operating. Even this suggestion met with definite refusal. The French and Belgian Governments emphatically declare that there will he no question of evacuation except in proportion as Germany makes payments —apparently, therefore, until the total German reparation liability lias been integrally discharged—and the reiterated announcements to this effect can only be interpreted as an intention to remain in occupation of Ruhr at best for a period of not less than 06 years, which in view of the generally admitted improbability of complete execution of the schedule being found practicable may be extended indefinitely, ir not in perpetuity. Such a situation can only be viewed by the Government with the greatest concern . It vividly conjures up the danger of international relations being affected in Hie matter of threatening to disturb international peace. The Government cannot believe that the French and Belgian Governments will be able to reconcile the opinion of the world to the indefinite maintenance of so perilous a situation. Already tiio occupation of Ruhr is having, direcLly and indirectly, a grave effect on the economic industrial outlook, liot in fiermanv. _\VhOSC. tan.tfjliY--id

pay reparations has been rendered more and more precarious, but in the rest of Europe, if not the world, and not least in this country.

Payments of War Debts.

Explaining the attitude regarding inter-Allied discussion for a financial settlement, suggested in the Note of July 20, the -main principle of the scheme is that Britain is ready, subject to the just claims of other parts fo the Empire, to limit her other demands for payment by the Allies and Germany together, to get a sum approximating to 11.2 milliards of gold marks, this sum representing the present value -of the recently funded British war debt of the United States.

The -concessions -the Government may be able to offer in respect to interAUied debts must accordingly depend largely on the percentage of this sum which they can recover -from Germany. Concessions -can -only be granted in a substantive form when -a general reparation settlement, is agreed upon, and is such that the Government can record their share of German payments as tn asset of real financial value. The first step must be to fix the maximum sum the Allies can reasonably hope to -recover, to be followed, -or accompanied by, arrangements which ensure the effective re-cstab-lishmcnt -of Germany’s finances and credit on a sound basis and a guarantee of punctual payment of the German debt by a system of control, free from the economically unsound impediments inherent in the military -occupation of Ruhr. The Government offered to discuss sympathetically the' question of the future security of Belgium, and Belgium warmly welcomed the offer, but France remarked that the object had nothing .to do with Ruhr and -the discussion was postponed to an unnamed date. Having regard to the _ French Government’s now declared -indifference no useful purpose can be served by pursuing the matter.

Arguments Summarised, Summarising the arguments put forward, -the reply says that the view of His Majesty’s Government is that ■the occupatibn -of Ruhr is a forcible interference with Germany’s economic life and that it cannot assist in the necessary restoration; not -only will it prevent the realisation -of any surplus for reparations, but by intensifying the disorder of German finance and -currency it will have the gravest reaction on .trade. The Government, therefore, regard as doomed, to failure the methods pursued by France and Belgium to secure reparations. The Government -consider the impartial fixation of the German liability at a figure not -inconsistent with Germany’s practical power of making payment a matter of great urgency. When steps are taken to ascertain the real value of the assets represented by German reparations and -to secure its realisation without further depreciation, the Government is ready to deal as generously as circumstances will permit, and in the light of their respective capacity to pay with debts due to Britain by the Allies. The policy laid down by Mr Bonar Law at the Paris Conference in January had not changed, and it -means that Britain is prepared -to waive the interest -on the very large amount which the British taxpayer holds to be due as the obligations of the Allied Governments. The reply concludes; “The Government hope that the above explanations will convince -the French and Belgian Governments of the reasonableness -of the British position and win their assent to its acceptance. The Government are reluctant to -contemplate that the possibility of -separate action may be required in order to iiasten a settlement, which cannot much longer he delayed without the gravest consequences to the -recovery of trade and "the peace of the world.

Debts Not Cancelled

In a separate memorandum bn the inter-Allied debts, the Government says the willingness which they and their predecessors had shown to discuss the French Government's arrangements, whereby the burden of the French debt to Britain might be mitigated, must not bo interpreted as a waiver of their rights as creditors, which is governed solely by the contracts under which the money was advanced on securities which they hold. It is an inadmissible doctrine that a French Government Treasury bill given to the British Government for value received Is a less binding obligation than a similar bill given to a private Investor. The payments due on French treasury bills represent amounts which the British Treasury is, in fact, paying to the holders of securities issued on behalf of the French Treasury of- which the French Treasury received the proceeds. While ■the Government have, by continuing to renew the bills beyond the period of contract, tacitly recognised that the time has not yet arrived for giving effect to their intention that they should be redeemed out of French loans raised on the London market when French credit is sufficiently reestablished, it must be clearly understood that the carrying out of this intention remains an obligation of the French Government, which cannot be honourably repudiated, and that in the meantime the practice of adding interest to capital cannot be indefinitely continued and that the commencement of payment of at any rate a part of the interest should bo made as soon as the 'Sterling and franc exchange becomes reasonably stable.”

THE REJECTED NOTE,

ITS PROPOSALS.

Australian and N.Z. Cable Assn. LONDON, August i2

A White Paper issued includes the proposed identical Note to Germany which Britain drafted and submitted to the Allies, and which France and Belgium rejected. Its main points were that the Allies were disposed to think that positive advantage might accrue from an expert examination of Germany’s capacity for payment; that such a course could put Germany’s allegations of a diminished capacity to the "test of fact, and remove excuses for evasion. It also pointed out that the economic value of Germany’s guarantees must largely, depend on the factors to which the German Note made no reference, such as the stabilisation of the mark and balancing the Budget. It must be clear, however, that no guarantee would suffice unless accompanied by some form of international control of German financial administration. Further, that antecedent to the reopening of the question of reparation payments the German Government would be well advised to put a stop lo passive resistance in the occupied territory.