The New York herald., 1921-06-14
REP ARATION PARLEY
RAISES FRENCH HOPE
Economic Understanding
With the Germans Is
Now Promised.
EFFORTS TO CONTINUE
Eventual Modification OF
London Agreement Fore
shadowed by Conference.
MAY CHANGE METHODS
German Trade Fictitious Now,
Says Diplomat, and Pay
ment Will BE Harder.
MAY CHANGE METHODS

Special Cable to THE New YORK HnaA n.
Copyright, 1891, by TIE NEW York HERALD.
New York Herald Bureau.
Paris, June 13.
Conversations dealing with ques-
tions OF reparations and restitutions
between Louis Loucheur French Min
lister for the Liberated Regions. and
DR.. Walter Rathenau, German Minis
ter of Reconstruction. continued at
Wiesbaden to-day, are attracting great
attention in France, as they afford
what is perhaps the most hopeful
promise yet had of an economic un-
derstanding between Germany and her
principal creditor under the terms OF
the London agreement. The calm tone
which the French press has taken of
these conversations. which are the
first held directly between two Minis
ters of ehese countries since the Agadir
incident in 1911, affords the best
augury for the future.
Following this important if not
momentous direct conversation be-
tween The two Minister'S it was an
nounced that the experts would con-
tinue their exchanges and endeavor
to arrive at a detailed plan for eco
nomic and commercial cooperation b.
tween the two countries, and provid-
ing for the return to France Of indus
trial and other material taken by Ger
many during the war.
Twin Diplomatfsts.
The striking analogy In the position in
their respective countries Of the two
conferrees, M. Loucheur, one of Frances
greatest industrial chieftains, as DIR.
Rathenau is in Germany, and both
holding Identical portfolios in the two
Like DR.. Rathenau. NJ. Loucheur has
many enemies who are waiting 20 entrap
him. but his friends believe he IS about
to achieve Frances reconstruction.
There was the greatest meaning In DR..
Rathenau's statement to Mr.. Loucheur
yesterday when he was quoted by
French correspondents as saying that
his acceptance Of the portfolio of Re-
construction in the German Cabinet in
dicated that the Wirth Ministry was
completely sincere in its acceptance of
the London agreement, adding: 81 am
an industrialist whose signature is
known. and when / place II at the bot
tom of document it has great value"
Another significant fact Is that the
conference Is the outgrowth Of an idea
by these two Ministers and not a Gov
ernment suggestion The invitation
came from DR.. Rathenau and was ac-
cepted Immediately by NJ. Loucheur.
Not ony has the meeting indicated a
better understanding between the two
countries. but 1t apparently fore
shadows the modification eventually Of
the London agreement-not respecting
the total amount OF reparation. but the
methods of payment. 1t Is believed
here that NJ. Loucheur sympathized
with Dr. Rathenau's points.
but it will take him some time TO educate
the French to his point of view. In the
main their conversations seem to have
embraced the following IDEAS;
views Compared.
I. DR.. Rathenau does not approve the
rs per cent. expectation equivalent. be-
lieving that the allies have miscalcu-
lated because of the low value of the
mark. which Is to-day enabling Ger
many to enter markets which in the
future will be closed to her. and also
that its operation, by inducing an excess
production for expectation Will only
weaken Germany internally and COM
plicate her annual budgets.
3 DIR. Rathenau disclosed to NJ.
Loucheur a scheme he has worked out
for putting the whole German nation on
the most rigid basis OF economy with
the object OF paying the German debt
insisting that the Germans are used to
discipline and will readily accept the
Spartan treatment he proposes to adj
minister. This Is regarded as an in
dication in itself that DR.. Rathenau be-
lieves the debt must be paid.
8. No specific substitute for the
equivalent OF the IS per cent. tax on Ger
man exports was offered by DR.. Rath-
enau, but NJ Loucheur seems to have
been sounded generally on Frances
probable attitude toward greater pay
ments by Germany In material and
labor and also the prospect of striking a
middle route between the Paris and the
London accords OF the Allies by increas-
of reparations annuIties. In this con-
ncction DR. Rathenau repeatedly en-
phasized his belief that the present IL a
fictitious period In German trade and
that in the years 10 come Germany can
not pay France unless the latter ac-
cepts large part Of what is owing TO
her in labor and material NJ Loucheur.
on the other hand. said France could not
allow material or labor 70 be deducted
from Germany's payments In any cur
rent year. but asked tina; Or. Rathenau
investigate whether by the cooperation
OF certain purchasing groups IN Ger
many II would not be possible to
echelon these charges over long period
OF time. as Is customary In ordinary
business
4. Germany still believes the repars-
tions could be better effected n she
placed the bonds on the market herself
with the allied guarantee back OF them.
To this proposal NJ. Loucheur offered no
encouragement declaring that in no case
could Germany expect an allied guaran-
tee.