Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-28
DEBT FARLEY HITS
SNAGSAT OPENING
Mellon and Edge Cable Home
as Three Issues Arise,
Awaiting Hoover Reply.
BY LELAND stowe,

"A A<A~AANAANAS SAS"
BY Cable to The Star.
PARIS, June 27.-At least two and
possibly three obstacles to q Franco
Americas agreement on the methods OF
applying the war debt and reparations
suspension suggested by President Hoo
yer already have presented themselves
to Andrew w Mellon. American Secre-
tary of the Treasury; Walter E. Edge,
American Ar hassador here, and French
government officials in the negotiations
proper. which opened today at the min
istry of the interior. In addition there
is possibility of certain political OBJ
stacles or conditions on the French side
which may further complicete an ac-
cord between the Paris and Washing
ton positions.
Tonights evidence Is that the nego-
tia ions will be difficult and that Ger
manys position threatens to become so
involved in the discussions that II Is
possible that the proposed visit of DR.
Heinrich Bruening. the Gsrman chan
cellor, and Or. Julius Cur Jus, his for
eign minister to France, may be ac-
tolerated to facilitate the Franco
American efforts.
Policy Firm As Farley Opens.
The official opening of the new rep
arations negotiations, following the 1885,
to-1Se vote of confidence by the Cham
Der Of Deputies in the government s
debt policy, took place at O'Clock this
afternoon. The chambers vote. which
came early this morning after an all
night session, in which some deputies
had denounced the United States, stip-
ulated that the government adhere to
i its policy Of insisting on payment by
Tla,~ af 1te 70
ton annuity, so as to maintain inviola-
bility of the Young plan.
At the conference this afternoon, Mr..
Mellon and Mr.. Edge sat with j. Theo-
dere Mariner, counsellor Of the Amer
lean embassy in Paris, and Robert T.
Pell, attache of the American embassy.
Sitting n for the French were Pierre
Laval the premier; Aristide BRAND,
foreign minister: Pierre-Etienne Elan
din, minister of finance; Francois Pie
tri, budget minister, and Andre Fran
co.'s Pencet. undersecretary Of national
economy.
Await HoOver's Reply.
On this basis France had, in the
three last named, o trio of flnancisl
experts to one for the Unit:d States,
and 1t is notable that, aside from Mr..
Mellon, the United States is represented
by no first-elass expert on the repara-
tons question, about which the whole
French resistance centers.
The meeting at the ministry Of the
interior lastsd just short of three hours;
Premier Laval, in a statement, said:
Another meeting will be held. but no
date his been fixed. 1t will probably
be on Monday"
This strengthened the impression that
certain difficulties have been eneounted
which require lengthy communication
with Washington over the week end
and undoubtedly will necessitate q re-
ply from President Hoover before prog
ress can be made.
Loan Clause New Issue.
After the meeting Mr. Mellon and
Mr.. Edge went directly to the embassy
and were in immediate communication
with Washington, for which purpose
the services of stenegraphers were re-
quired. Officially no confirmation that
any dtficulties had arisen were given.
but three Obstacles are strongly indi-
Gated by yesterdays and today's events.
First, 1t is learned that Washington
objects to the portion of the French
reply which. offering to return Frances
unconditional annuity of 500,000,000
marks ($l18,750,0oO) to the Bank for
International Settlements for use In
loans to Germany, then states: ALSO
in the countries of Central Europe"
The American view-which it Is be-
lieved MIR. Mellon stressed to the French
ministers teday-is that under the
Hoover plan the whole Of the benefits
arising from the suspension of pay
ments should go to Germany to aid hel
economic recovery, and that for that
reason France should agree that the
whole of her unconditional annuity
should be lent back to Germany in
stead of being scattered over Central
Europe, especially since in the latter
case a considerable portion might be
diverted to Frances smaller allies, in
GLIDING Poland and Rumania.
Want France to Take Risk.
Second, and even more important, Il
| the method proposed by France By
which the Bank for International Settle
ments would assume responsibility TO
lending France 500.000,000 marks
Washington's reaction to this is said Il
be that in such procedure France woult
not assume any direct risk, which lattel
would be laid rather upon the Bank 10
international Settlements, where tn
shareholders of all the participatin
countries would carry it, although a
the end of the years suspension tn
money would be assured of returnin
to France.
In a nutshell. the American position
appears to be, who is going to TAX
the risk Of Frances unconditional por
ton loaned to Germany and why shoul
not France assume this risk directly in
stead of the Bank for 1ntsrnations
Settlements?"
Third, an obstacle as yet not clearl
4