Evening star., 1932-12-02
LAUSANNE ISSUE
REVIVED BY NOTES
British Reveal That United
States Approved
Parley.
Continued From First Page.)

Continued From First Page)
Their plea is based on three main argu-
ments: /, That the Lausanne agree
ment was made with the cognizance
and the approval of the American Gov
ernment: 2. that to continue with the
naynent of debts to the United
States would be disastrous to the whole
world, including this country. and 3,
the December installment. If paid, would
ruin completely the incipient world eco
nomic recovery, which has given timid
signs of revival in the last few months.
Stress Laid on Lausanne.
Much stress is laid upon the Lau-
same agreement by both the French
and the British governments. 1t was
stated in official quarters this morning
that one very important point Is being
overlooked in the examination OF the
plpa for a revision of debts and the
suspension of the December payments.
And this is that at Lausanne, 1t was
not only Germany who was released
from the payment Of the reparatlonS,
but all the intergovernmental European
debts have been suspended at the same
time. And such an agreement would
have never Eeen possible had the prm-
cipal European creditor natlons-Great
britain and France-not been lnf1u-
enced BY the Hoover moratorium and
by the Laval-Hoover conversations OF
October 1881. whereby they gained
the conviction that their own depts
would be considerably scaled down.
InterIinking Theory Not Accepted.
The British government states for the
first time in plain words that the
American theory that debts ana repara-
tions are not interlinked never has been
accented by the other countries: The
United States Government has fre-
o1entlv reiterated that it does not ad-
NIT any connection between reparatlons
and war debts; but this differentiation
in the matter of inter-governmental OBJ
legations arising out OF the war IS not
accepted by other countries which nave
creditor claims on the German govern
The British then add that there is
de facto connection between these
two sets of inter-g governmental obli-
cations and this was by implication ad-
mitted by the United States Govern
ment when it proposed moratorium
on all nter-governmental oblgauo1S
of the British government are based ON
a misconception and misinterpreta-
ton of different acts and expressions OF
the American Government through
its representatives here or abroad re-
mains to be seen. The members of both
houses. ii is understood, will have ample
opportunity to discuss this matter When
President Hoover sometimes next week
refers the note to Congress.
Regarded Clear Note.
In the whole history of Americas
relations with foreiA countries there
never has been received note con-
ceived more clearly and written more
brilliantly than the document received
Yesterday from the British foreign
office. Sir John Simon. the British
foreign secretary, had the reputation,
before accepting his present Office, o1
being one of the foremost lawyers IN
the world. He has applied undoubtedly
all his legal talent and his clear vision,
which earned him enormous fees while
he was a lawyer and not diplomat,
to put before the people OF this coun-
try, not only Great Britain's Tragedy,
should she be forced to continue her
debt payments, but the disaster which
would visit America as well.
He cid not resort to the usual diplo-
matte veiled threats. Bluntly he tells
the American people that ~ under
the stress of the present crisis. his
majesty's government have had to
modify their system (of free trade)
and to adopt tariffs But the United
Kingdom still imports from abroad
goods to the value of several hundreds
So ..z nf
exports and it would be necessary to
consider what action could be taken
to secure that the sterling proceeds OF
these imports were used more largely
for the benefit OF the British market.
If war debt payments had to be re-
sumed, 1t is apparent that the exchange
position of this country would need TO
be strengthened by a reduction OF the
very heavy adverse balance of the Wis
ible trade of the United Kingdom and
the United States, which amounted to
100000 pounds in 1881. This
could be done by adopting measures
which would further restrict British
purchases of American goods.
The result of such restrictions would
inevitably be to reduce specially the
market in the United Kingdom for
American farm products. To the ex-
tent, therefore, that payments were re-
sumed to the United States Treasury
must follow to the United States pro-
ducer"
Commercial Loans Separated.
The British government refuses to
admit that there can be any similarity
between the war debts and the COM
mercial loans. The latter are raised
by foreign governments for productive
purposes and serve to ultimately in
crease the economic prosperity OF the
world.
Such loans directly afford means
whereby the borrower can repay them
with interest and at the same time
become more prosperous" But the war
loans are an entirely different propo-
sition. Fertile fields become barren
and populous cities shatte. ed ruins.
Such expenditure instead of producing
wealth destroys in few hours stored
up riches of the past. Like the shells
on which they were largely spent, these
loans were blown to pieces. They have
produced nothing to repay them and
they have left behind nothing but fresh
complications and perplexites." The
immediate deduction is that they should
not be paid, especially when the creditor
is the United States. which has bene-
fited immensely during the initial stages
of the World War. For example" 4"
states the British note, before 1915
the United States export surplus varied
from 100000, 900 to 600,00O,O00. In
1917 and 1918 it exceeded $4,000, 900 900
and in 1919 it was about $4,000, 900 900"
The payment of war debts, the British
maintain would be equally disastrous to
the citizens of the United States as to
those living in every country in the