Evening star., 1925-10-15
FRENCH EXPECTED
TO 0. K. DEBT PLAN
Acceptance of U. S. Proposal
for $4,000, 900 Interest
and New Farley Likely.
BY The Consolidated Press.

BY the Consolidated Press.
Although there has been no official
intimation or even informal hint in
the press dispatches, officials of the
American Government will be much
surprised if France finally turns down
the proposal that SAC, ,000. 900 year for
five years be paid and the whole debt
problem examined anew in 1929.
There have been suggestions that
NJ. Caillaux is preparing a counter
proposal, but this may ask for a
change in the form, rather than the
substance, Of the America offer. The
American Debt Funding Commission
stated that the $4,000, 900 should be
regarded as current interest" on the
principal. This would, in French eyes,
establish precedent as to interest
rate and there Is therefore reason to
believe the French finance minister
will agree to pay the $40 100000 a
year, but will request that the pay
ment be left unciaSSified and as simply
part payment on what shall later be
agreed upon as the total debt due.
France Has Nothing to Lose.
The French proposed s4o,0o0,000
Year for five years when they were
here and asked that the other pay
luentS he conditioned on Frances "a.
pacity to pay. America COuntered
with the proposal that no definite
agreement be reached now as TO what
should be paid after five years. but
hat another conference he held in
1880. France has everything to gain
snd nothing 10 lose by accepting the
American plan, especially since Pres
adent Coolidge has permitted the
American press in the last "a hours
III convey to the world and particu-
iarly France the Information that for
eign borrowers Will have better stand
ing in the American market for pri-
Nate loans if an understanding on war
debts has been reached
What Mr.. Coolidge hasn't said is
that he will lift the ban against for
e!gn loans if the French accept the
ive-year-plan proposed by America.
But il may be taken for granted that
he Will do so. Thus, by paying s40,-
100000 a year. which is only $40 0,000,-
600 above present annual payments,
France puts herself i'll a better posi-
fion to borrow money through Amer
fcan private bankers If she settles
her debt problem she will feel entitled
to lower rate of interest. too, than
hitherto obtained by France for pri-
Tate loans. 1t might pay France to
accept the American proposal because
of the saving effected in interest
charges on private loans.
Confident of Acceptance.
II France, on the other hand, de-
clines to pay anything more in the
next five years on the ground that
she is unable to pay, her credit will
have received a severe blow and her
borrowing power impaired. So
France cannot confess incapacity to
pay only $20,000.000 a year. Also
The American offer involves no strings
or promises beyond 1880.
That's why there is such confidence
here that the French cabinet will
accept the American proposal, with
slight changes as TO the way the
funds shall be applied.
Incidentally the commercial debt
which the French incurred by buy
ing surplus war; stocks left by the
American Eypeditionary Fore
comes due in 1890. 1t amounts to
s407.0O0,000. The French have been
paying interest at per cent. If a
debt parley is to be held in 1890, the
French may not want to agree in
1880 to a refunding of the CONNER
Cial debt and they may ask now for
a merging Of the commercial debt
parley with the general war debt
Such a. proposal probably would be
accepted as the American Govern
ment suggested In the recent negotia-
tionS with France-that payment of
the commercial debt might b espread
over a period of years and the whole
consolidated into one obligation.
Copyright. 1925D