Evening star., 1932-07-12
LAUSANNE CLAIM
ST|RS.U: S. CHIEFS
Chamber|ain's Story Of Debts
ParIeys Greeted With
Astonishment.
BY CONSTANTINE BROWN.

BY CONSTANTINE BROWN.
High officials Of Che State Depart
ment are astonished at the statement
made in the House Of Commons by the
British chancellor of the exchequer,
Neville Chamberlain, to the effect that
Washington knew Of every move made
at Lausanne because the European
delegates were in close touch with the
American representatives at Geneva.
The State Department denied en-
phatically that any American repre-
! sentative took any part whatsoever In
the reparation discussions.
When the first reports of American
delegates "meddling" in purely Euro
pean affair reached Washington June
2l, Secretary Stimson stated there is
no truth in the reports from Lausanne
that the United States Government or
| its representatives have had any nego-
| tiations or made any suggestions as to
debt questions at Lausanne or Geneva.
, Our delegates inform us that no dis
cussion whatsoever on this subject has
taken place between them and the
representatives Of any foreign gov
ernment"
This statement was made before Presi-
dent Hoover issued his 80 per cent arms
cut proposal. Until this plan was ad-
vanced American representatives kept
carefully away from Lausanne That
| town was banned to all American Off
cials.
| Visited There Often.
| After the President made his arms
1 cut proposals American delegates at the
arms conference at Geneva, especially
Ambassador Hugh Gibson and Norman
DAYS, visited repeatedly at Lausanne
and had frequent conversations with
Ramsay Macdonald and Edouard Her
riot.
| These conferences. the State Depart
ment maintains, dealt exclusively with
the Hoover proposal, as it is evident
| from the statement made by Secretary
Stimson yesterday when he said no
member or representative of the State
Department has taken any part either
at the Lausanne discussions or had any,
thing to do with the "gentlemen's"
agreement.
There is no doubt whatsoever that
| the State Department. realizing as II
does the feeling of Congress could not
| have encouraged its representatives
abroad to hold cut any hopes to the
European powers that the United States
would be willing to discuss at the pres
ent time debt revision or cancellation.
But 1t must be borne in mind that the
chief delegates Of the United States at
| Geneva went to Lausanne to put before
4 IF
! ton OF armaments proposal, emanating
from the Chief Magistrate Of the
United States.
| 1t is considered plausible that the
American delegates. after having dis
charged their official duty, could have
considered themselves free to discuss
with the European statesmen the mani
| fold problems of the world as men to
men" 1t is possible that the American
delegates in pleading for the acceptance
| OF the Hoover disarmament proposal
may have drawn the attention of the
British and the French prime ministers
to the fact that the American Congress,
while definitely opposed to any debt
reductions at the present time, would
change their point Of view If some con-
structive step toward disarmament were
taken by the world powers.
Administration Silent.
| Whether such informal conversations
we're sufficient for the British and the
French prime ministers to consider it as
| hint to make the "gentlemen's agree
ment" which makes the Lausanne agree
ment dependent on Americas reducing
the war debts is a matter which does
not concern the administration in sny
| way.
The State Department has no COM
ment to make on the question of the
advisability of reducing the allied debts
to the United States. The President of
the United States has indicated his
point of view on the capacity to pay of
each debtor nation" last December
when he asked Congress to revive the
War Debt Funding Commission. The
Senate has turned down that sugges-
ton.
The State Department has conse-
quently nothing more to say and it is
certain no encouragement has been
given to any foreign power on this mat
ter. The representatives Of the inter-
eSted foreign powers in Washington are
said to have reported to their respective
governments that the feeling In Con-
gress is that there should be no reduc-
ton Of war debts without drastic re-
OuCtlOn IN armamentS.
The point of view of certain highly
placed officials is, however. that the
present misunderstanding between
Europe and the United States is most
untimely. The Lausanne agreement is
considered in certain official quarters
as the greatest thing that has hap
pened IN the last decade. 1t indicates,
1t Is said. realization on the part OF
all the European countries and especially
on the part of France, that bankrupt
Germany is more dangerous to the
world than strong Germany, and 1t is
on that theory that Premier Herriot
has accepted a reduction of the Ger
man debt which is tantamount to a
cancellation.
Great Benefit Seen.
There Is an almost unanimous opin-
ion in official quarters that the Lau-
same agreement, If ratified, would bring
about rapid recovery of Europe and
that the United States will benefit at
least as much as the rest of the world
from such recovery
On the other hand, a default Of Ger
many on her reparation payments
would have as an inevitable con-
sequence, 1t Is said, the eventual de-
faulting on all private debts. America
In the last 10 years has been the most
! important lender in the world loan
markets and its investments abroad
exceed the war debts by some seven
billion dollars.
Almost every American, 1t is pointed
out, is directly or indirectly involved
in these foreign loans. Banks, invest
ment corporations, insurance COM
panies, all have invested a good deal
of their reserves in foreign loans and
the defaulting on these securities
would hit the American people as hard,
II not harder, than substantial re-
duction of the allied war debts.
Under these circumstances number
of people in responsible positions fee
it would serve no purpose to shut the
door completely to Europe about what
the United States might do in regard
| To tho deht question OF cOllrSe. mos