Evening star., 1931-12-28
PLAN FOR PARlEY
DISCUSSED HERE
France and Britain May Be
Forced to Avail Selves of
PoStponement Clause.
BY CONSTANTINE BROWN.

bt So4ND hAN iSito fANs
The news that Premier Ramsay Mac
Donald of Great Britain and Pierre
Laval premier of France, have decided
to meet at an early date to discuss a
common action in regard to payments
Great Britain and France will have to
make to the United States after June
80, 1882 created a good deal of specu-
lation in Washington today.
1t is obvious that If the former allies
agree to allow Germany to postpone
payments OF reparationS, they will be
compelled TO avail themselves of the
clause inserted in the debt agreements
they have made with the United States
whereby each nation, at its option, can
postpone payments of sums due to the
United States. Great Britain and Italy
can exercise that privilege for a period
of two years, while France can post
pone her payments for three years.
1t would seem consequently an easy
way out Of this present critical situa-
ton If all these countries decided to
postpone payments and allow in turn
Germany to do the same thing.
Must Pay Interest.
On closer examination of the debt
agreements the situation is not as
simple as it appears at first sight.
While the debtor nations are allowed
to postpone payment of the principal
they owe the United States, they are
compelled to pay interest on the
amounts due.
Great Britain is in a more unfavor-
able position than any of the other
European countries. She will have 70
pay on the 18th of December, 1882, a
total of Sl83,90o, 900 to the United
States. OF this total amount only s3o,-
10000 represents the principal which
Is poStponsble, while the balance of
$l50,000000 represents interest, which
is not postponable. The British budget
shows this year deficit of about $400,-
900 600.
If she is compelled to pay the above
mentioned interest in gold, with a de-
preciated currency, she will be COM
PEELED to purchase for 300 days half a
million dollars day. 1t is easy to fore
cast what will happen to the pound
sterling If the British treasury is COM
peeled to purchase such sum in the
open market. The position of France
is better. She is entitled by the debt
funding agreement with the United
States. upon 80 days notice to post
pone payment on any principal due for
a period of three years"
owes S38, $50 Interest.
The principal due by France to the
United States in the fiscal year 1893
amounts to $2l,477,132. The payment
of this amount can be postponed by
notifying the Treasury 80 days before
payment is due.
But she will be compelled to pay in
any case the sum of $38,522,850, which
represents the interest on the total
amount of about $4,000, 0,000,0 900 she
owes this country. Half of this sum
is due on December is, 1882 the other
half on June 30 1888 Whether France
will be willing to forego the reparations
she is entitled to get from Germany
under the Young plan, and pay the
interest on the money she owes the
United States Is an open question
Those in close touch with develop
mentS in France think that the Laval
cabinet could not survive "a hours if it
made any agreement whereby France
should receive nothing from Germany
and continEH to pay us close to $40
900 900 year.
Under the circumstances it is ma
tural that the British and the French
premiers should get together to find
some kind Of solution to the entire
debts and reparations question, which
IN their own minds is closely inter-
woven
France feels probably stronger on
this matter than Great Britain because
the French Parliament ratified the debt
funding agreement with the special
reservation that should at any time
Germany not pay the reparations. the
French government will be at liberty
not to pay anything to the United
States or to any of the other creditor
countries. This amendment of the
French chamber has no binding force
as far as the American Government is
concerned because it has never been
incorporated in the actual funding
document, but it has a good deal Of
Importance in the eyes of the French
Parliament, which can always say that
the debt agreement with the United
States has been ratified by Frances
legislative body with that special pro-
viso that if the Germans default,
France IS not bound TO pay to her
creditors either
Two Ways Open.
What agreement can be reached bH-
tween Laval and Macdonald is difficult
to forecast. AS things stand TODAY
there seem to be only two possible ways
out-either both agree to default all
payments, that means the principal and
the interest on the principal, and see
i what America is going TO do about it,
or they agree to present before the
American Congress their respective bal
ance sheets and in this manner set the
whole machinery in motion for re-
examination by the American Congress
of Europe's capacity to pay. This solu-
ton has been indicated by President
Hoover when he asked Congress for the
re- stablishment of the Foreign Debt
| Commission, but it was almost unant-
| mouSly turned down by the Senate and
the House Of Representatives. 1t is be-
| iieved, however, in foreign circles in
washington that if the request came
direct from the debtor nations the
American Congress might conceivably
| look upon the whole situation from ar
| entirely different angle.
It is said that Great Britain would
not be opposed to this latter solution
but 1t appears that France is most re-
luctant to take such a step. 1t Is against
the dignity of great and powerful ma
ton, the French say, to submit It's bal
ance sheets to creditor nation. y
means that that nation considers itseli