Evening star., 1932-07-06
Proposal Would Settle "War
Guilt" Issue Raised by
Germany.
MCDONALD TAKES ROLE
OF ARBITRATOR IN FIGHT
Compromise Offered by France in
Demand for German Bond on
Reparations.
BY the Associated Press.

BY the Associated Press.
LAUSANNE, Switzerland, July cit
was reliably reported this evening that
legal experts had solved the war guilt"
controversy raised by Germany at the
reparations conference by inserting a
single phrase in the compromise agree
ment by which it is hoped TO bring the
conference to a close
The phrase reads.
THE treaty of Versailles, in so far as
it concerns reparations, is hereby
abrogated."
The draft treaty was the subject Of
conference this evening between
Prime Minister Macdonald Of Great
Britain, Chancellor Won Papen of Ger
many and Premier Herriot of France.
There was to be another meeting Of
the six participating powers later this
evening.
Prime Minister Macdonald became
the virtual arbitrator of the debts and
reparations dispute today, when France
and Germany laid their cases in his
hands.
For days Mr.. Macdonald has been
working at high pressure to effect a
compromise between the two nations
Yesterday he delivered what amounted
w ga AAeAAAAobGAA Wy ACSAoAAAAS bAAdL bAAC4C
would have to be settlement by Thurs
day because he was going home that
night.
The French are sponsors of a plan
which would make cancellation of rep
arations conditional upon revision by
the United States Of the debts due her
from the World War allies. Germany
has declined to accept any proposal
linking reparations and the allies debts
Bond Proposed.
France proposed that Germany de-
posit a bond of several billion marks
with the World Bank in lieu of repara-
tions annuities. Part of the total would
be distributed among the governments
receiving reparations. The rest will be
used for the economic reconstruction
of Europe.
Germany baked at the amount Of the
bond and offered a smaller figure.
Premier Herriot of France said at first
it would be impossible for him to re-
luce the original figure, but subsequently
he did compromise and the amount
now mentioned varies between two and
four billion marks.
This afternoon legal experts were
working on a compromise, which they
hoped would be sufficiently strong to
appease the German demand for re-
noval of the war guilt" statement with
out destroying any part Of the Versail-
les Treaty. The German delegation
was understood to have said the war
guilt" issue was even more important
to them than reparations settlement.
Herriot Makes Demand.
A fiat declaration from Premier Her
riot that either the United States must
revise war debt schedules or Germany
must continue to pay reparations under
the Young plan chilled the conference.
Premier Herriot's declaration was
made last night, at the end of a day
Of negotiations which led nowhere. II
was given to the press in explanation
of why France demands a safeguarding
clause, protecting her reparations in
come in case America remains adamant
on the debts, in any agreement nego-
tiated here.
At the same time the impression grew
that Chancellor Won Papen of Germany
attached the greatest importance to the
elimination of the war guilt" clause
from the treaty of Versailles and resto-
ration of Germany's right to arm, con-
sidering them more important, for ex-
ample, than fixing the amount Ger
many might still be called upon to pay.