Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-30
SERIOUS HITCH
|NDEBT DEBATE
French Want Definite knowI-
edge Regarding Payments
in Future Moratorium.
BY CONSTANTINE BROWN.

Serious bitches are reported to have
occurred In the Paris negotiations be-
tween the Secretary OF the Treasury
Andrew w. Mellon. and Ambassador
Walter E Edge on the one side. and
Frances finance minister, Pierre Etienne
Flandin. on the other. These men are
driving a hard bargain and, for the
time being, are sticking TO their original
positions.
In spite, OF the uncertain situation,
however. the impression in Washington
is that an agreement Is likely 10 DE-
reached at an early date.
The principal reason why State De-
partment officials and diplomats are
optimistic is that Europe cannot afford
to see Germany break down.
News reaching Washington indicates
that the situation IN Germany continues
to be threatening and that wave
of depression has followed the buoyant
outlook of few days ago. People have
resumed Withdrawing funds from The
ReichSbank and the capital flight from
Germany is III full swing again.
Early Action Imperative.
Under those circumstances all early
agreement on the Hoover proposal
seems imperative, and more So for
Since last week ii has been obvious
that all parties were agreed that Ger
many should pay into the Bank Tor
International Settlements the uncon-
ditional part OF the Young plan pay
mentS. which would be reloaned to
Germany immediately. Negotiations in
which Secretary Mellon is directly in
volved pertain to "technlcalitleS. but
these details are of paramount im-
m
States.
The French seem " be looking
farther ahead than the American
Government. They seem to be some
what Skeptical about Germany'S per-
manent economic restoration within
short time: on the contrary, many
French economists are inclined to be-
lieve that after this intergovernmental
debt holiday. Germany may still be
forced TO ask for u moratorium, 10
which she is entitled under the Young
plan. Whether she will be forced 10
do so at the end OF the present holiday.
or year or two later. is naturally UNI
certain. In any case, the French want
to know exactly what would happen
III such an emergency.
French Seek Shorter Term.
Hence the somewhat embittered dis
the French government. Mr.. Mellon
as President Hoover'S spokesman, is re-
ported TO have suggested TO the French
a somewhat long period for spreading
payments Germany would be allowed
to forgo this year. The exact period Is
not definitely known here, but 1t Is said
to be between 20 and 80 years. On the
basis of 20 years. Germany would have
to pay each year $4,000 600 along with
her annuities after 1882. The French
are reported to be demanding much
shorter term. This. however, is conf
paratively minor point
The principal point is that the French
want definitely to know whether this
annuity postponed at President HooVers
suggestion will not be included in any
eventual moratorium the Ger mans may
want to declare later-that is to say,
should the Germans avail themselves
of a moratorium two or three years
hence. the French want it definitely
understood that the moratorium would
not be applied to the inStallments due
from this years poStponement.
In order to safeguard their interests
the French insist that either Germany
should spread the 500 10000 withheld
this year over period OF D Or 10 years.
or If longer period is necessary, that
the agreement be reinforced with u
solemn declaration by all the contract
ing parties that the suspended sums
shall not be included in any eventual
moratorium. but shall be treated ex-
actly as the unconditional part OF the
Young payments. 49,.
II is around these highly technical
and important questions that the pres
ent negotiations revolve, and, although
they sound complicated because they
deal with comparatively distant and
uncertain future. solution is expected
to be reached shortly.
(CopyrIght, l93n.