Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-02
BY FRANK H. SIMONDS.

method or end1ng q German nnanclal
crisis which constituted world men
ace. No settlement was possible, for
the simple reason that no political So
luton was discoverable for the issues
which separate France and Germany
and are the root cause Of the whole
situation.
AS far back as last March, when the
Germans suddenly proclaimed their
purpose to form tariff union with
Austria, the battle was joined between
Paris and Berlin. and it has continued
with the same fundamental spirit ever
since Confronted by what they re-
Earded as a violation of the treaty of
Versailles and a threat to their own
security and the independence OF their
Polish and Czech allies, the French
went to war again.
They did not this time, as in 1914
and in 1923-that is, at the time of the
World War and of the Ruhr occupa-
tion-mobiliZe their troops. Instead,
they employed their money. With great
rapidity they drained, not only out of
Germany, but out of Britain and other
countries in which there were large
French short terms loans, funds in such
great volume that on the one hand the
Germans were crippled by direct French
Withdrawals and on the other hand by
indirect French pressure, for the other
states owing France had to recall money
from Berlin.
French Strategy Clear.
The purpose of the French strategy
Was clear and totally hostile. The
French were resolved, once for all, to
force Germany to accept the terms OF
the treaty of Versailles as final or
break her. 1t was for them war, and
it was war which they did not launch
until they had made all the necessary
preparations, which were financial.
They calculated that Germany, in her
precarious financial situation, could not
stand the strain of the French attack.
They also calculated that Great Britain
and the United States, with their vast
investments in Germany would be
forced sooner OF later to intervene ana
to press Germany to meet French terms
as the sole means of saving herself and
their investments.
The first part OF the campaign went
according to. plan. BY the third week
in June the Germans were on the point
of a financial collapse At that point
the next step of the American Presi-
dent had not been anticipated by the
French. They had relied on our tradi-
tional policy of isolation and Mr..
Hoover'S statements at the time OF the
recent meeting of the International
Chamber of Commerce to keep us out
Of the conflict. They had expected
Washington to do nothing and New
York to bring pressure upon the Ger
mans.
When Mr.. Hoover interviewed directly
end made his debt moratorium, his
move was just about as welcome to
the French as the arrival Of the PruS-
slams at Waterloo. Laval. however, had
no choice but to follow the Napoleouic
example. In military parlance he had
Ito contain" the attack from an UNI
pected direction, while he finished with
Germany. Thus as Napoleon under
took to hold off Bluecher at Waterloo,
while Ney smashed wellington, Laval
sought to engage Mr. Hoover in diplo-
matte conversations, while the German
collapse was made inevitable. Laval
was more successful than Napoleon,
and by the time the moratorium con-
VerSationS were completed German ruin
was also unacceptable.
Crash Soon Follows.
Thus the American press had hardly
ceased its congratulations of the French
for their tardy but welcome assent to
the Hoover plan when the collapse in
Berlin actually took place. France had
then accomplished precisely the thing
she set out to accomplish. Moreover, in
got all but small amount OF her money
out OF Germany. simultaneously she
had modified her vast financial re-
sources everywhere.
When the German crash came the
situation was this: Germany was in
the posture of a besieged city at the
point of surrender. Only the arrival
of provisions would permit her to go
on. In this case provisions were money.
l.
ate funds to meet a pending crisis, but
long-term loans to enable her to re-
establish her situation. But France
was the only country in the world
which could provide the latter, and
unless France would join in lending
the former, none of the nations which
had already sunk huge sums in Ger
many would dare to go further. And
the steady fall of German securities
was in itself fatal obstacle to floating
any new loans on any money market.
The French had therefore won their
fight, but they had not been able to
exploit victory by compelling Germany
to surrender Internationally, as had
happened in 1918 and again in 1923 in
the Ruhr. On the contrary, they were
face by the danger that the concern of
the nations with large investments in
Germany to save might result in some
international agreement which would
permit German recovery without meet
ing French political terms.
French strategy, therefore, was at
once revealed. When Luther, head of
the German Reichsbank, rushed to
Paris in search of help, he was politely
informed that Laval was sympathetic,
but could only talk with German au-
thorized to discuss political terms,
When the debate was resumed at the
Bank of International Settlements at
Basel, France made the same response.
Scene Shifts to Paris.
The scene then shifted to Paris, and
on the suggestion Of the British and
American statesmen, Bruening and Cur
titus, the German chancellor and for
eign secretary, rushed to Paris. But
while this expedition was an enormous
triumph for French prestige-Since 1t
was but three months since the Ger
mans had launched their Austrian prof.
ect and now they were in Paris as sup
plants asking for financial a1d-tha
French were not interested in prestige
alone. They were out to make Germany
agree to accept the treaty OF Versailles
Paris therefore led to nothing
Eruening said, in effect, 81 can't live at
home if make political concessions.
IT understand perfectly" Laval replied
but can't survive If I don't get po-
litical concessions for any francs may
put up" So everybody trooped over. tc
London to try again. But before going
to London the French insured failure
there by making their participation
which was against their will, contingent
upon the avoidance Of all political
questions.
The French position was predicateo
Upon the fact that, having beaten the
Germans to their knees, the French hao
not the smallest intention Of letting any
one else interfere in the making of the
pace terms. 1t was for precisely the
same reason they had insisted that
In Paris the first conversations should
he between themselves and the Ger