Evening star., 1932-01-21
EUROPE APPEARS
NEAR DECISION ON
DEBT. SHOWDOWN
Views Exchanged on Meth
odS of Stopping Payments
to United States.
MONDAYS CONFERENCE
CALLED OFF BY LONDON
Germany Demands Permanent So
luton Before Expiration of
Hoover Moratorium.
BY CONSTANTINE BROWN.


The time for making clean slate OF
all reparationS and war debts is rap
idly approaching its final phase.
Views as to how to approach this
question to the best advantage of every
body are being exchanged between the
principal European nations Mean
while the Department of State, while
pleading complete ignorance OF what Is
going on across the ocean, is informally
being told of the progress Of the nego-
tiations between Great Britain, France
and Italy either by our representatives
abroad or by the representatives OF those
countries in Washington.
The decision reached to postpone the
Lausanne Conference, it is said In re-
liable quarters, was not due exclusively
to any precarious situation Of the Laval
cabinet or to the desire of postponing
the reparationS question until after the
elections. in France and in Germany,
but mainly to the fact the principal
creditor nations Of Germany had be-
come convinced their principal DEBTOR
will or cannot pay reparations any
longer.
Two Schools of Thought.
The conversations between London,
Paris and Rome are reliably reported as
not dealing with the fact OF whether
Americas debtors will or will not pay
their debts, but only with the best
methods to stop any further payments
to this country.
There are two schools OF Thought IN
Europe today One is. that each ma
ton should approach the United States
individually and after putting before
the administration the financial sltua-
tion of each country, to ask for can
collation. of debts. The principal argu-
ment in favor of such theory Is that
if Germany cannot continue to pay her
repaIations there is going to be oehcit
IN the budget of each of the creditor
nations. To fill the gap new taxes viii
be essential and by increasing taxa
tion the capacity to pay OF all our
debtors will be impaired.
1t has been repeatedly stated by re-
sponsible people in this country that
zach of the debtors will have to refund
their Indebtedness to the United States
exclusively in accordance with its ca
pacfty to pay.
If the taxpayers of Italy or Great
Britain or France are compelled to pay
heavier taxes to make up for the bud
ts<axy deficiency caused by Germany's
defaulting their capacity to pay us is
lessened and consequently the govern
noents of those countries think that they
have a legitimate reason to ask America
either to cancel or draStically revise the
annuities paid by them each year.
Humiliating to France.
It is reported that most of the Euro
mean nations with the exception OF
France are in favor Of such SOLUTION.
France finds this humiliating, however.
Her leaders do not think it would be
dignifeo for important European ma
tions to present TO the American Con-
eress their balance sheets and ask, nat
in hand, this country for reduction or
cancellation of debts
The second theory being discussed
between the European chancellories is
that the European nations reacn com
mon agreement and final decision not
to nav a cent of their debts TO the
United States as long as Germany Is
not paving reparations. When the
unitv of action has been agreed upon,
the United States should be informed
and told that from certain date atter
july l, the European powers VIII no
longer be able to pay us any further IN
stallments on war debts.
So far no definite agreement mas peefi
reached between the interested powers.
France is not particularly Interested IN
the cancellation of debts for several rea-
sons. First Of all she Is paying us only
a part of what she is getting from Ger
many, and, secondly, while she may De
prepared to scale down somewhat the
German reparations, she does not want
TO cancel completely Germany's mdeot-
edness to her. France has more than
one club TO swing over Germany's head
in case she intends TO make clean
slate of the entire reparations problem,
and by joining the other powers In an
nouncing her intention TO cancel her
debts toward us would deprive her OF a
powerful argument OF continuing TO
claim reparations from Germany.
The State Department has officially
no knowledge of what is going on in
Europe in regard to the question OF
reparations and debts and the Secretary
of State has very timely informed the
interested government we cannot see
any link between reparations and debts.
In order not to appear too adamant
however. it is reported from Paris ne
drew the attention Of the French gov
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