Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-02

nlZeS WIFI dppEecidtion ZIG Sonuo, go
of the French reply to the Presidents
proposal of June 20 and now desires to
review the situation which has grown
out of the American proposal, the
French governments note In reply OF
June "a and the subsequent negotia-
lions which have taken place between
Ambassador Edge, Secretary Mellon and
the French ministers.
"While the Presidents offer was the
direct result of the crisis in Germany.
which, from all reports, is imminent
and is still imminent, I am sure the
French government will realize that
| the purpose of the United States was
! to give general relief to the world.
The President believed that it would
| prove an important step in advanc-
| ing world recovery from the present
economic depression. The PLAIN pur-
pose was by relieving one element OF
Strain in world economy, to give the
| forthcoming year to economic recoV-
| cry, and to help free the recuperatlve
| forces already in motion, thereby
contributing to the relief OF unem--
ployment throughout the world ana
| to tighten the burdens Of unduly low
prices to agriculture. The offer met
with worldwide response. what II
meant in the way of restoring CONN.,
dence is reflected in the rise OF COM
mOQlLy dlO SSCuiLty PAASNo
out the markets OF the world.
Plan Withholds Relief.
"Au of the interested governments
has sipnified their acquiescence. FIence,
| however, suggests certain conditions,
which. II we understand their import
seem to us to withhold the intended
relief to Germany and not to conform
to the spirit of the Presidents proposal,
which contemplated complete su&peh-
sion of all payments on intergovern-
mental debts during a period OF one
wear. In order that we may now cover
one point left open in the original pro-
posal, we may add that 1t is our view
that all postponed payments should
be funded over long period OF. say
IS wears, and to bear interest at the
average rate paid by the creditor gov
ernments on their own public debt at
the end of the preceding fiscal year.
| 1T is, of course, an eSsentlal part
of the Presidents proposal that pay
ments under all existing agreements
! shall be resumed at the end of the
wear. Thus, the continuing force OF
| these agreements is in no way I'M
| paired. 49,
I'm this proposal to postpone for the
forthcoming year the payments due I'M
der its own international agreements,
| the American Government will be con-
| tributing a total CT 1852 900 600, which
is the largest contribution made by any
government. 1t recognizes. however,
that substantial sacrifices will be c9lled
for by other governments, including
that of France.
1T is obvious that on the success OF
the plan Germany will be the largest
immediate beneficiary. since the pay
ments which she Is obligated to make
during the coming year on account OF
intergoyernmental debts are about
$500 100000. Other nations and do
minions also will benefit by various
sums in addition to the $400, 900 900. 1t
must be remembered, however, that
| Germany is In the NEST difficult eco
nomic situation Of any country. We
feel that in a larger sense all the ma
tions will b.nef1t from the improve
ment in their economic life which will
fellow the adoption of the Presidents
program.
In Accord on Two Points.
"Our Government welcomed the
statement of France on the 24th OF
June, expressing her keen desire tc
collaborate, and especially the specific
statement that France would abst1 III
as a provisional measure and during
period of one year from retaining any
payment sent by the German govern
ment In this connection We empha-
size again the provisional character OF
the Presidents plan.
The French government insists
however, as matter of principle that
unconditional rsparations amounting to
approximately Sl3l, 100000 the year
should be paid. in order that there
might be no interruption Of the CONT
nuity of the payment of unconditional
snnuities Our Government is willing
| to recognize this point of view to the
extent of agreeing that the payments
should be made to the Bank for Inter-
national Settlements, provided they BE-
Immediately reloaned to the German
government. This would maintain the
principle of continuity of payment and
at the same time constitute no drain on
the German general economy. We
seem, then, to be agreed on two all-im-
portant points
First, that France will forego the re-
tention Of any payments from Germany
for the period CT enc year, and
Second, that the principle of CONT
nuity of payment of unconditional an
nuities is recognized while complete re-
lief TO Germany is. afforded.
Four Points of Difference.
There would seem to remain four
points of difference:
First We understand that the French
government desired 10 have The Bank
of International Settlements re.oan the
sums paid to German industrial and
finance concerns rather than to the
German government. We feel this
would be incompatible with the Presi-
dents proposal CT relief TO governments,
as the French sugges ion would give
no direct relief to the German govern
ment.
Second, the French government sug-
gests that $25,O00,O00 OF the uncondi-
| tional payments paid into the Bank of
international Settlements should be
made available Tor loans to Central
European countries, more particularly
those whose buagets are affected by the
Suspension of reparationS payments.
Tie diversion of this sum from Ger
many is violation of the broad pro-
posal of the President to suspend all
| payments of int2rgovernmcnehl debts.
Moreover, the practical disadvantage OF
this exception to the Presidents pro-
posal is that If any of the other coun-
tries who have already accepted the
Presidents proposal should make SIM
| liar suggestion with reference to loans
to particular countries, the reconcilia-
ton of all these differences would be
practically impc ssible. Could not the
principle of the Presidents proposal be
preserved and this relatively small
amount of relief b. given to particular
countries through cooperative action OF
the central banks, or through the Bank
of International Settlements?
| Third, the two governments differ as
to the time over which the suspended
payments should We funded. Without
at this time modifying our suggestion
that IS years is the proper length of
time, we do not believe that it would
be impossible to reach an agreement on
this point provided the ether questions
could be disposed of. especially if no re-
payments are to be made in the next