The New York herald., 1922-10-12


New York Herald Bureau.
Paris. Oct. IL.
Reports from Washington of a now
attempt to settle the problem of war
debts elected a new and explicit
statement OF the French position to-
day from one of the highest authori-
ties Of the French Finance Ministry.
1t may be summarized as follows:
Frst-The French Government, af-
ter long study of European conditions,
does not believe there is the slightest
possibility of France meeting any por-
ton of her debts or interest during
the next four years, as all available
receipts for that period must be used
in building up the devastated regions.
Second-France for the moment
cannot accept Senate Lodges sugges-
ton that her promises to pay on
demand" be replaced by new series
of securities providing definite dates
for payment and definite rates OF in
terest.
Third-The French Government is
doing its utmost to find a new for
mula for the regulation of European
debts and the reparations tangle, and
probably will submit detailed scheme
by Premier Poincare when the inter-
allied financial conference Is held in
Brussels about November 1.
New Assessment of German Debt.
This plan will call for a new assess
ment Of Germany's indebtedness on a
basis OF actual reparations only, all
charges for pensions and wartime allot-
ments, &C., to be wiped off the slate.
In Frances case this would reduce the
French claim nearly 25 per cent. This
plan is expected to arouse opposition in
Great Britain, as the British share In
reparations was originally demanded TO
cover pensions charges in the British
dominions.
Much depends. OF course. upon the
nature OF the settlements the British will
make with the United States" the Gov
ernment's financial spokesman told THE
NEW York HERALD correspondent to-day.
From ali Information we have received
from England II IS very doubtful
whether Britain herself is able to make
a settlement calling for the full payment
of her debt in twenty-five years.
$50 far as France Is concerned II is
generally conceded here to be abso-
lutely out of the question for France to
make any such arrangement. During
the next four years Frances entire in
come must be devoted to meet ordi-
nary budget requirements and to'build
I'D ruined factories that pre-war condl-
tions may be restored II is getting more
difficult every year to obtain money OF
n public already burdened with heavy
taxes. and II is doubtful whether the
present issue OF Treasury bonds at per
cent. will bring in much more than
enough to meet the budget deficit OF
1000. 600. 900 francs this year.
added to this difficulty France must
not forget the danger of political dis
tirbances, as certainly IL taxes are in
creased there will be great popular op-
position and a demand that Germany be
made to pay all costs in the devastated
regions.
another factor. which even America
financiers recognize. is the danger in
signing anything calling for the imme-
diate payment OF interest. Were this
done Immediately. as some political In
tcrests have suggested. II would mean a
great rush to buy dollars. sending ex-
change 10 at least eighteen francs to
the dollar inside another twelvemonth
or probably double that.
Forecast Recovery In Four Years.
However, II We are allowed to work
slowly and surely. four years will sec
us on the way TO recovery, with
steadily increasing sums ready to be de-
voted to meeting the American debt.
Incidentally this was discussed In New
York and Washington by NJ. Parmen-
tier. and though he was then unauthor-
ICED to go further than TO explain the
French impossibility of paying until the
devastation had been repaired he re-
ceived the assurance of sympathetic
treatment from the highest American
authorities. Probably this explains the
evident inclination OF the American
Government not 10 deal 40 rigidly with
France as with Great Britain. which
has regained pre-war capacity to meet
her obligations"
It was insisted In official circles that
there Is no desire here to transfer the
projected financial congress from Brus.
sells 10 London unless specifically .ro-
posed by the United states. Although
the date Is not definitely fixed II Is
felt that t must be held in tho middle
Of November. Just after the American
elections.
French. British and Belgian Finance
Ministers virtually have agreed that
there must be some modification OF
Germany's indebtedness to enable Ger
many to induce foreign investors TO
lend her the cash TO meet her war
obligations.
NJ Poincares reported scheme for
cutting down the total by waving
claims for pensions certainly will mark
tremendous advance of French
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