The New York herald., 1922-05-11

Willingness TO accept II, as they con-
slider 1t would give them the right to
demand actual physical restoration OF
their Donetz Basin holdings.
Acceptable to Russia.
The Russians realize that the for
mula does not attack their theories on
property. though pledging them to
compensate the previous owners ade-
quately-not as a matter OF principle
so far as Russia is concerned but as
a return for allied aid in reconstruc-
ton.
What the Belgians and the French
are insisting is that, irrespective OF
The generality of the Cannes resolution
against the interference with other
sations' economic systems, they stand
for the actual aud concrete fact that
unless the Soviet Government ac-
acknowledgement of the principle of pri-
vate property is recorded and guaran-
teed there is no possible chance of
further inducing investors to venture
into Russia.
The Anglo-Italian angle is opposite
that, they cannot get investors to aid
Russia until Russia is brought into the
comfy of nations, that Genoa will
bring her in and that once in and the
rifst credits put TO work, Russia, in the
light of the tendency already mani
tested by Moscow, ultimately will come
10 take the samesyiew of private prop
erty as that taken by other nations.
The Russians propaganda here all
ready is indicating such a course, point
ing out that revolutionaries always
seize private property. Hence it is be-
leved that Tchitcherin will rewrite the
note extensively along these lines.
The original Russian reply to the AL
lied memorandum was twenty pages
long and was preceded by letter from
Tchitcherin wherein he said This re-
ply Is based on the Cannes resolutions
from which Sthe Allies departed. Two
Powers particularly Interested in Rus
sis did nQt sign the memorandum
Certain Debts Admitted.
The reply examined the memonran-
dum's thirteen articles and held that
the nrst.n about propaganda. was not ac-
ceptable.
AS to Articles IT,, ILL., and ~. about
pre-war debts. the reply admitted In
principle the recognition of the debts. but
said that Russia could not pay until the
Powers gave her the necessary credits
.ot only commercial and industrial but
also State credits.
Article v.-Russsia considered the
payment of small creditors a debt of
honor. but here again Russia needs
credits first of all.
Article VII tPrivate Property RUS
sia recounted the history of nationaliza-
ton during the Russian revolution and
said the same thing was done by the
French revoIutionists, who never indem-
nified the French proprietors. The reply
proposed q commission Of experts to con-
slider Article VII.
NJ Rakovsky explained that the Rus
sian reply had examined the preamble
Of the memoranda clause by clause.
DO you answer yes or 'no?'" he was
asked.
Ralxovsky replied "rhat alternative
is presented to an enemy conquered on
the battlefield. We came here to discuss
the important question of credits affect
ing the basis OF Russia's state and
political organization.
1T is~a matter of finding medium
line conciliating Russian and Western
interests Some clauses we accept some
We reject AS to Article VII, foreigners
must respect the Sovlets customs and
institutions We cannot permit this con-
ference to become political machine
for the destruction of the Soviets nor
can we make concessions that menace
the Russian state and prepare the
restoration of Carbon by the restora-
tion of proprietors."
schanzer's Plan for Article VII.
The Italians say that Italy VIII GER
iairly conclude the treaty with the
Soviet. Schanzers formula for Article
VII. is: "The ssoyiets principles as 10
naturalization are respected. neverthe-
less foreigners will enjoy their own
properties.
Tchitchern sent a curious letter 10
Schanzer asking If France approved OF
the memorandum and what governments
approved The sting m his letter was
~, the fact that while Barthou threatens
IN leave the conference il Russia does
not accept the whole memorandum,
France herself does not accept the
memorandum.