Evening star., 1924-12-14
BRITISH POLICY. BLOCKS
FRENCH DEBT FUNDING
Objection to Better Terms to Other
Debtors Creates Deadlock Which Will
Be Difficult to Break.

France Initiated Discussion.
Meantime came the recent compli-
cation of conversations between Am
bassador Jusserand and our Govern
ment over the French debt to the
United States. The discussions were
on the initiative of France-we had
made no demand-but it is fairly GER
tain that they were not more than
sounding to discover what terms
might be available. Since Germany
had a substantial moratorium for the
next two years and no German
money was likely to. come to France,
there was no real question of
Frances payment to us, but a settle
ment on easy terms was still con-
ceivable, provided it was accom-
panied by long moratorium.
But indiscreet and unfounded re-
ports of possible terms at once fired
British Indignation and reused Brit
ish protest Britain was paying us
on basis which seemed to us gen.
erous, but to the British ssvere.
Now, there was question Of France
paying us on better terms. But not
only did the British feel they were
entitled to as easy terms as the
French, but they also pointed with
justice to the debt France owed
them, only a little less than the
if France could pay us, she could
not pay Britain.
British Taxpayers' View.
AS far as we were concerned, there
was no reason in equity why we
should not make any terms we chose
with France. We had never agreed
to give the British a most-favored-
nation clause which would lead to a
revision of the terms of their pay
ment to conform with any more
favorable terms granted any other
nation. Yet, quite obviously, no Brit
ish taxpayer could see justice in be-
ing asked to pay more than his French
neighbor, whose taxes, to his mind,
were much lower than the British.
With us the British had no remedy,
but with his French debtor he obvi-
ously had and could demand that the
French agree to make payment on
their debt to Britain on the same
terms and at the same time he paid
the United States.
But such a British demand meant
that France must Immediately under
take burden of upward of $780,
100000, representing the debts to the
United States and Great Britain, while
at the same time she continued to
carry the burden of s3,500,00O, 900 in
Cured in reconstructing her ruins.
This debt of S11, 900, 100000 would, in
fact, represent a total larger than the
entire burden placed upon Germany
by the Dawes plan and would put
upon the French taxpayer an annual
burden in excess, therefore-and
largely in excess-of what Germany
would pay France on account Of repa-
rations, assuming that Germany paid
the maximum under the Dawes esti-
mates.
In principle, too, the Italian sit
uation would be even worse, because
while the French payments on a ST.
500, 0,000,0 900 debt to Britain and Amer
lea and $4,000, 100000 on the domestic
debt for reconstruction would be par
tally balanced by German payments
on capital say of $500, ,000, 900 the
French share of reparations pay
ments, assuming the Dawes plan
worked at its maximum rendition
Italy, with $7,000,000,OO0 owed abroad
to America and Britain, would not get
from the German reparations more
than enough to meet the costs of her
own reconstruction. Her burden,
then, would be, given her compare
tive population, wealth and resources.
vastly heavier than the Dawes plan
had laid upon Germany, a burden
carefully guarded so that, IL 1t proved
excessive, it would be automatically
lightened.
Italy VitalIy Concerned
Since Italy did not undertake any
discussion of debt payment, either
with Great Britain or with America.
or for that matter with France, to
whom she also owed money-she was
not drawn into the affair, but it was
and is clear that she is vitality con-
cerned and that her situation is even
more difficult than that Of France in
all respects. And France, through
Herriot, promptly issued significant
statement, which indicated that Brit
ish protest put an effective end to
Franco American discussions.
Meantime feeling showed itself in
a new direction. We had certain
claims upon Germany, growing out of
wartime damages and also out of our
costs for the army of occupation on
the Rhine, the total of which was
fixed at 100000, 900, and we asked that
this sum be considered in the alloca-
tion Of the sums paid by Germany on
account of reparations under the
Dawes plan. To this the continental
powers assented. but the British OBJ
jected. They agreed that we should
get $200, 100000, the costs Of army of
occupation, but for the rest they
argued we had made separate treaty
with Germany and refused to accept
the treaty of Versailles on which all
Dawes payments were based
The British objection disturbed the
continental nations because it i'm
piled that any payments to us over
and above the $200,000,000 would
have to come out of the continental
nations share Of German payments.
Thus the British at one time effec-
tually blocked any settlement as be-
tween France and America and as be-
tween America and Germany, through
the Dawes plan. Obviously the Brit
ish were free to do this because they
were paying US what they owed. us,
while the continental nations were,
not free to take similar stand be-
cause they were our debtors.
Worse Mess Than Ever.
Now the whole debt question stands
in worse mess than before, because
it is clear that there can be no set
tlement either of the interallied debts
in Europe or of the continental
debts to us as long as the British
maintain their present stand, and
there is no reason on earth why they
should modify it. That a majority of
Britons, that is of the financial world.
would like to see the interallied debts
eliminated, even by substantial reduc-
tions, goes without question, but the
British taxpayer is certain to refuse
to let France off from her debt If the
Immediate apparent consequence is
to enable France to pay the United
States. Nor is he likely to consent
that Britain give France easier terms
than the United States gives either
France or Britain.
Our own financial people, official
and otherwise, recognize quite clear
1xy nf FRA nj
italy, that any settlement, any fund
ing of debts, must include long NOR
atorium and materially better terms
than those which the British obtained