Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-01
THREE MAIN POINTS
BLOCK DEBT PLAN
U. S. Officials Remain Opt
mistic, However, Despite
Difficulties.
BY CONSTANTINE BROWN.

BY CONSTANTINE BROWN.
There are three salient points which
render an agreement with France en-
President Hoover's proposed intergov-
ornamental debt and reparations holiday
difficult. These are:
%. Length of time over which the
reparation5 amount Germany foregoes
this year will be spread, ~
CO. Whether Germany will be re-
loaned by the Bank of International
Settlements the whole amount Of the
unconditional payments, and,
80. Guaranty fund.
High administration officials explain
that the two first questions interest the
United States directly inasmuch as they
affect the spirit of the Hoover plan
while the third interests only the sigma
tories of the Young plan, but is never
theless of paramount Importance.
Frank Statement Wanted.
In high administration quarters the
need is felt for frank and open state
ment Of the entire situation. 1t Is de-
sired that not only the American peo-
pie, who are called to make the great
est sacrifices if the Hoover plan is ac-
cepted, should know what Is going on,
but also the rest of the world should
know on whom the blame should be
laid in case that the plan fails.
Regarding the question Of the length
of time over which the postponed an
nuities shall be paid, 1t Is authoritative
ly stated that the administration Is will
ing to discuss the matter with an open
mind When the French suggested that
the 500, 100000 owed by Germany this
year should be paid within a year, the
President replied that the whole pur-
pose of his plan would be defeated, be-
cause it is inconceivable that within IL
months after the severe crisis Germany
is undergoing, she should be in a posi-
ton to pay more than 5000 100000.
The basic idea of the Hoover plan
Is to give Germany plenty CT time to re-
cover and for this reason Secretary of
the Treasury Andrew w. Mellon sug-
gested to the French cabinet a period
of Is A1arS over which the postponed
payments should be refunded. The
French came back with proposition of
five years, but indicated that they were
willing to consider two extensions of
five years each in case Germany's re-
covery should not be as rapid as ex-
pected On this subject, however the
administration has hopes that an ar
rangement may be reached
Loan Serious Question.
Regarding the question as to whether
Germany should be reloaned the entire
amount she is supposed to pay into the
Bank for International Settlements, the
situation is much more serious. After
having won the point that Germany,
in order to safeguard the spirit of the
Young plan, should pay 500.00000 gold
marks (Sll9,000.00 into the bank, the
French have sprung a surprise on the
United States. They suggest that Ger
many should be reloaned only por-
ton of the amount paid while another
portion should be loaned to Central
European countries.
The French do not mention whether
those loans should be given to Ger
many's former allies or to France S
political satellites. The truth is that
the whole of Central Europe is always
eager for loans, and there Is nothing
in the French note to indicate whether
the sums paid in would be used for
political or economic loans.
The crux of the situation Is that
while 1t was at first understood that
Germany would be reloaned the whole
amount the moment she paid it into
the bank, there is now an element Of
uncertainty as to what is going to hap
pen to that money. This is entirely
against the spirit and the purpose of
the Hoover plan, and one can safely
say that this suggestion will not be
accepted by the American Govern
ment. Washington cannot consent
that any part Of the German money
should go to other nations. 1t pointed
out to the French government very
! clearly that the United States was fully
,aaware of the distress which prevails
4 In some Of the Central European States,
A bu that In case of acute distress the
Y major nations, including America,
:, eould get together and help them out.
: Assured Against Hardships.
4. Such was the case in the past and
there Is no reason, Washington says,
b why the same thing should not be
y done in the future. AS matter of
4 fact when Rumania week ago pointed
>. out that under the Hoover plan she
would suffer serious financial loss,
Secretary of State Henry L. Stimson
assured the Rumanian Minister N
washington Charles A. Davila, that we
would see that his country should not
suffer any hardships from acceptance
of the Presidents proposal.
Regarding the question Of the guar
anty fund, which does not concern us
directly. a little explanation is neces-
sary. At the time the Young plan was
negotiated France succeeded in get
ting for herself the largest slice of the
unconditional payments, the other ma
tons being given very small part. In
case of a moratorium they would get
almost nothing and therefore there was
an agreement that in case Germany
awaited herself of the privilege Of de-
claring a moratorium, France would
Immediately pay into the Bank OF In
ternational Settlements 100000 900
marks ($119,000,000), which would be
distributed among the different nations
annlllt1pS.
Which means that France in that year
would not receive the whole 100000 900
marks but would pay the other nations
whatever Is due to them.
The French have informed us now
that at any time before this years I'M
conditional payment is paid, If Ger
many should declare moratorium,
France would not be compelled to put
the 100000, 900 marks in the 1nterna-
tional Bank, as provided by the Young
plan. Instead the unpaid balance, that
is. the part reloaned to Germany this
year, should be put Immediately by
Germany into the bank to fill up the
guaranty fund.
This is a matter which the French
must arrange with the other creditor
nations, since we are not signatures OF
the Young plan, but it Is matter on
which the French stand perhaps more
strongly than on anything else.
No Time to bubble.
There has been a good deal Of talk,
especially in France, about the d1cta-
torial manner in which the United
states made the debt holiday proposal
to the nations of Europe, particularly
to France. 1t is likely that some people
should have found our manner not sufti--
GENTLY dilatory and consequently not
in accord with the old-time diplomatic
usages. But this, according to high
Government officials, is no time to
bubble about forms and words.
President Hoover, it must be remem-
hered. had been informed at the outset