The New York herald., 1922-08-03
BRITAIN TO USE DEBT
AS CLUB ON FRANCE;
CALL NOTE BLUNDER
Lloyd George Gains Card to
Play Against Poincare
at Conference.
HOME POLITICS ISSUE
Caters to Taxpayers Who
Complain of Increase
in Burden.
COMMONS DEBATE TO-DAY
English Financiers Criticize
Balfour's Statement as
a Mistake.
COMMONS DEBATE TO-DAY

Lord Balfour's note on allied debts
and suggested cancellation now seems
to have been Influenced by Lloyd
Georges desire to have fresh politi
cal card to play when he confers with
Poincare. In some London circles the
note is regarded as blunder.
The note failed to shake the Wash
ington policy that the United States
war loans to the Allies must be paid.
1t spread official dismay in French
Official circles. where it was held that
it precluded any general settlements
at the coming London conference, and
means that the German reparations
will not be reduced.
In Berlin the mark took another
drop with the Government making no
effort to stop 1t.
Special Cable TO THE NEW YORK HERALD.
Copyright, 1929. by THE NEw YoRK HERALs
New York Herald Bureau,
London. Aug. 2.
effort to provide Premier Lloyd George
with a new card to play when he meets
M. Poincare at their conference Mon
day were responsible for the publica-
ton Of the Balfour note, according to
reliable Information as to what trans
pired at the Cabinet meetings. The
desire to have a card to play against
Poincare was the most important con-
slderation.
There is no general effort on the
part OF Government spokesmen to as
sert that the note was not directed at
America. THE NEW York HERALD cor
respondent learns that the Cabinet was
fully aware of what the reaction might
be there. but decided that the other
considerations warranted taking the
risk.
In this sense the note represents a
direct about face on the part of Mr..
Lloyd George. Two or three days ago
he was convinced by the representa-
tions made by Sir Auckland Geddes
and Ambassador Harvey that the time
was not ripe to suggest anything
savoring of cancellation. Since that
time, however, two things have hap
pened. The Cabinet divided along
strictly political lines. those most ia
iniliar with the general feeling in the
country insisting that the policy Of
canceling the continental debts and
paying the American debts could not
be followed NJ. Poincare informed
Germany on Saturday that he would
act independently before the London
conference unless Germany continued
the present scale Of payments for
Frenchmen prior to the war.
Expect Desired Effect.
The neighborhood OF Downing Street
tonight is confident that both OF these
primary considerations will be fulfilled.
Vt is felt now that Poincare will not act
lcfore the conference and IL is also felt
nat to-morrow's debate In the House
of Commons, In which Premier Lloyd
George Is sure TO take a leading part,
VIII develop an agreement by the coun-
try with the tone OF the Balfour note.
Throughout to-day in non-official and
IN financial circles opinion has been
hardening In criticism OF the Balfour
note. More and more II Is being con-
sidered a blunder In certain circles.
IL appears to be tho opinion OF those
most influential In political circles here
that as piece OF political tactics to
obtain It's Immediate object the note is
nasterfully clever and a complete sue
cess, but regarded as a serious contribu-
ton TO statesmanship 1t Is very bad.
Those fnanciers and traders who are
glecful that Lord Balfour succeeded In
revealing In most skillful manner what
American pressure for the payment OF
the British debt means to Europe. ap-
prove OF the note.
But those who seriously wish TO end
Europe's troubles point with warning to
the further fall in the mark on the Lon
don exchange. which to-day reached
$3.50 to the pound sterling. and to
Frances avowcd determination to re-
spond to the British note by Indicating
Berlin as the responsible quarter to look
for the cause OF the economic distress.
Those who fear for Anglo-American
friendship believe that Lord Balfour Is
playing with gunpowder and is involving
himself In another series Of circles such
as has distinguished European politics
since the end Of tho war.
Catering to Taxpayer.
Politicians here say that II Britain
presses France TO pay. France will press
Germany. and the other nations will
press each other and while America
Will be irritated by the attempt 10 throw
the blame entirely on her. the settlement
Of the European question will not be ad-
vanced one jot by the note.
However much It may be argued that
Great Britain profted by the war in the
gain Of territory and the destruction OF
Continued on Page Four
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