Evening star., 1932-04-06
ECONOMICS HEADS
EUROPEAN ISSUES
Places Arms in Background.
Bright Outlook Seen for
Danube Union.
BY CONSTANTINE BROWN.

Economic and political aspects of the
European situation completely over
shadow today the reduction of arma-
ments issue.
The preliminary conversations be-
tween Premier Ramsay Macdonald and
Andre Tardieu ended yesterday with an
agreement "in principle" between the
two men. Premier Macdonald admitted
the conversations between him and the
French statesman were not confined to
the much-advertised Danubian confed
Grafton. but extended to a number of
other questions such as debts, repara-
ti0ns, the Italian-French naval dispute
and other such questions Italian and
German delegates are expected to reach
London today. They will Immediately
begin negotiations to reach an agree
ment on those problems Europe finds it
necessary to attempt to settle before
Secretary Stimson reaches Geneva.
The British and the French are
anxious to bring about a confederation
of the Danubien stateG OF the five
countries which are supposed to form
that confederation one, CZechoSlovakia,
is in a better economic position than
all of the smaller states and most of
the principal powers. Jugoslavia and
Rumania are hard hit, both financially
and economically, but their situation is
not sufficiently precaTious to demand
immediate action ON the part of the
big powers. Hungary and Austria are
on the verge of economic and financial
collapse. Unless these two countries
are Immediately assisted there IS a
danger that within the next few weeks
they will be confronted with a most
serious economic and social problem.
See Good Chance for Success.
On account of this situation the Brit
ish and the French believe a confedera-
tion of states, politically and racially
antagonistic to each other. has today
q greater chance of success than before.
Both Premiers Ramsay Macdonald
and Tardieu believe if the opposition
of Italy and Germany to the scheme
could be overcome it will be easy to
dispose of the racial feelings Of the
five interested countries, which will see
that it is in their common interest to
support each other economically.
The idea of a Danubian confedera-
ton has been in tie minds of the prin-
cipal European powers for a number of
years, but political fears and jealouSies
have prevented il being translated into
an actual fact.
Theoretically the idea existed in the
minds of the Germans even before the
World War. IR practice the Italians
started it some l8 months ago when
they suggested a confederation between
Italy, Rumania, Bulgaria, Hungary and
Austria based on a system of preferen-
tfal tariffs between Italy and these
states The French became nervous
over this scheme, which they interpreted
as political move of Italy to counter
balance the Little Entente and the
scheme came to naugllt
The Germans picked up this idea and
lat May they threw a bombshell by
announcing their economic union with
Austria and began pourparlers to extend
that union to Hungary and Rumania.
The French again got nervous and
brought the matter before the World
Court which decided by seven votes
against six that this union was Illegal.
The Italians, who appeared at first to
favor tn German move, supported the
French an5 the scheme was abandoned.
French Try Same Thing.
The French then tried the same thing
but were confronted with serious op-
position on the part of the British the
Italians and the Germans, because the
confederation. as the French saw it
originally, was based on a system Of
preferential tariffs among the interest
ed countries and France The other
powers saw in that move a French
scheme of assuring for herself large
market at the expense of the other
countries, and this scheme had to be
abandoned, too.
Finally, last month the Hungarians
and the Austrians acquainted the
League with their serious plight and the
French decided to propose confedera-
ton of states wherein no outside nation
would be treated better than the other
and suggested a loan of $50, 900, 600 to
put this confederation on its feet. The
loan, according to the French states
men, should be covered by bankers OF
all countries, so that France could not
be accused of trying to WELD partic-
ular influence in that new organization
by means of financial pressure.
1t appears consequently by an un-
biased analysis of the French scheme
that the French motives are not selfish
at all. That is to say that France is
merely endeavoring to prevent the col
lapse of the two weakest countries Of
Central Europe, Hungary and Austria.
Whether the other two powers. Italy
and Germany, see the situation in the
same light is doubtful Both these
countries are deeply suspicious of the
French motives They believe the leop-
ard never changes its spots, and while
prima facie the French motives may
appear altruistic, in fact France will
continue to WELD powerful influence