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

forthcoming year snail not Throw upUu
her the obligation to pay into the Bank
antee fund. We sympathize with
France in this aspect of the question.
We think this fear Is groundless be-
cause II all governments agree 20 the
American proposal, then there can be
no demand of a creditor government
for payment. If France, however, has
a real fear on this subject, then the
other governments concerned should
expressly free France from this anxiety.
"(b) The other aspect, however, OF
the question with reference to the guar
antee fund is more serious. Not only
the spirit of the Presidents proposal,
but the express provision thereof is
that the offer of the American Gov
eminent is conditional on like post
ponement for one year OF all payments
on intergovernmental debts owing the
to us also to seriously impair the spirit
Of the declaration of France to the
effect that she wishes no benefits from
the payments. The French government
apparently desires her postponement OF
unconditional payments to take the
form of payment in the Bank of In
ternational Settlements and loan back
to Germany.
This naturally contemplates that
be on the same footing so far as length
of time of postponement, etc, as SINH
lar arrangements made by any other
government. When, however. the
French government couples with this
suggestion the further suggestion that
the loans back to Germany shall be
considered exactly as though cash pay
mentS had been made by Germany to
France and cash loans had been made
back by France to Germany, and that
these loans should be considered n all
future times as funds available to
France to reduce or satisfy her guar
antee as to subsequent years, she is
departing substantially from not only
the spirit but the substance of the
Presidents offer.
Apparent Inconsistency.
ITO state the problem little Diff
ferently: France appears to be in
sisting that the funds paid by Ger
many into the Bank of International
Settlements during the year of suspen-
sion and released to Germany must be
credited to the guarantee fund just as
If France herself had actually made the
deposit. thus relieving France Of any
future obligation in respect of the guar
antee fund. This seems to US to be in
consistent with the suggestion that the
payment by Germany into the Bank of
International Settlements during the
period of suspension Is a mere matter
Of form, in order to assure the contin-
uity of unconditional payment. What
was regarded as matter OF form
in the first instance Is now evidently
to be treated as an actual payment.
In any event, it seems clear that this
particular proposal involves a moditica-
ton of the Young plan, which we I'M
derstand the French government was
particularly anxious to avoid. The
American Government, not being sig
natory Of course cannot undertake to
negotiate change.
THE American Government feels that
perhaps there is some misunderstanding
on the part of France as to the sacri-
fees which would be required from her
under the plan proposed.
we must assume that with the
present situation in Germany and THE
failure of the American proposals, then
! Germany will unQueStionably give no.
| tice fer the poStponement of all con-
! ditional reparationS as provided in the
Young plan, and that this portion of
| intergovernmental payment will not be
| forthcoming. Therefore, in measuring
| the sacrifices necessary, there can only
| be considered the effect of the uncon-
| ditional payments if Germany IS able
! to find foreign exchange necessary
/ to meet these payments If the Ameri-
| can proposal shall fail and il uncondi-
/ tional payments are postponed under
! the provision of the Young plan, and
even assuming that unconditional pay
ments are maintained. France would
receive from these unconditional pay
mentS, after priorities have been &C
cepted, approximately SOS, 900 900. She
would be obliged to pay. (Al The
guarantee fund of 100000 900 under
! the Young plan; OBJ $4,000. 600 to
Great Britain and the United States,
4 approximately.
Loser by 100000. 900.
~'Whereas her receipts from the I'M
conditional reparaticns, even II they be
maintained, would be less than one
half of this sum. Thus If the American
proposal should fail and the suspension
provisions Of the Young plan be invoked
by Germany. then France will be
the loser during the forthcoming
year Of general postponement by over
500 900 ,0O0
There is no escaping the fact that
the world will not emerge from the
present depression without temporary
sacrifices by all. Our Government
believes that cooperative acton in the
carrying out of well-conceived and
agreed-on program will not only
diminish the burden but contribute
materially to the restoration of normal
conditions which all of the nations so
earnestly hope for. In the light of
this major objective The American
Government hopes that the French
government. whose cooperation is so
essential. will find method to
reconcile existing differences so as to
permit a concerted effort by all in the
carrying out of the Presidents
program"
The text of the memorandum was
made public at the State Department.