Evening star., 1932-12-02

| Dy IIlt hSoOCldGSu iSSS.
PARIS. December 2.-Following is a
translation of the text Of the French
REPLY to the American debts note Of
November %, as given out here by the
foreign office and handed to Secretary
of State Stimson in Washington by
Ambassador Paul Cleudel:
The attentive and reasoned study of
the letter which your excellenCy ad-
dressed to me on November % on the
subject of the problem created by in
tergove.nmental debts and payment of
| the installment due December Is has
inspired en- the part OF the French gov
ernmeat considerations and thoughts
which it has instructed me to submit
without delay to the most serious con-
sideration of the Federal Government.
NV government notes first Of all with
satisfaction that the President finds
himself disposed to recommend to the
Congress a new study of the question
as a whole. which implies that in his
opinion such study would seem neces-
sary.
The French government does not
fail to realize that reduction OF debts
contracted by European powers toward
the United States may react upon the
American economic situation.
| It does not forget that an arrange
ment concerning it's debts was con-
sented to by the American Government.
World Crisis Cited.
On the other hand one cannot con-
test that since this period the gravity
of the financial and economic cr6is
which has ragged throughout the world
! has forced all interested governments
| to modify their positions with respect
| to settlement Of intergovernmental
debts. and has led them to adopt
series of concerted measures which
affect simultaneously reparations and
debts and which are destined to meet
| the necessities eXacted by existing cir
cumStances.
without prejudicing the character
and form which a new study of the
problems growing out of settlement of
intergovernmental debts might tak2 my
government is happy too register the
accord of the federal government con-
cerning the motives which justify it.
namely the reductions of payments
agreed to by the creditor nations at
Lausanne, the increasing weight of
debts resulting from the world economic
depression and the parallel fall OF
prices, the difficulty of obtaining foreign
exchanges, and finally the influence
| which solution of the debt question
may exercise on the world situation. .
| The well founded nature of these
motives, is, moreover, so evident, and
, the necessity of new arrangement SO
pressing, that it would be difficult to
understand. the principle OF revision
being admitted, that there should be a
| fulfillment of an accord which is con-
sidered as no longer corresponding to
the present situation.
Admits "Juridical Validity"
The French government desires to
| emphasize that it never has been in
| its mind to contest the juridical va
| lidity OF the various engagements which
are bound up with the origin OF the
war debts.
My government desires to emphasize
that the result for postponement as it
has been presented implies a simple
carrying over, leaving intact the rights
of the parties concerned.
| It does not seem to it, consequently,
to go beyond the proposal which Presi-
dent Hoover himself made in May, 1881.
On the contrary, it appears to it to be
normal, equitable. necessary sequel.
| 1t was at the request of the PreSi-
dent of Germany that President Hoover
put forth on May 20, 1881, his pro-
posal for postponement for one year
| Of all 1ntergovernmental debt payments,
including reparationS.
| On that occasion the Federal Govern
ment explained that it envisaged a
moratorium on debts due it only on
condition that there would be q similar
adjournment for one year of payments
on intergovernmental debts due the
principal creditor powers"
The American memorandum made 1t
| clear that the burden of intergovern-
mental debts which could be supported
| in normal times weighed heavily in
these times of crises.
This initiative, as the French Gov
eminent has pointed out, caused direct
prejudice to all existing agreements, and
notably suspended the working of the
mechanism set up by the Young plan
| for settlement of reparations.
| The development of events has shown
| that this suspension, once consented to.
was destined to be prolonged beyond
| the delay originally fixed
Laval Visit Recalled.
Furthermore, on the occasion Of his
trip to Washington, the French premier
reached an agreement with the Presi-
dent of the United States on the phrase
| ology of communiQue stating that
with respect to intergoVernmental debts
a new arrangement covering the period
of the depression might be necessary on
condition that the initiative came from
the European powers principally inter-
ested.
In conformity with this text, which
appeared to constitute something moral
ly new with respect to the intergovern-
mental debt regime, this initiative was
undertaken and in SO far as the European
powers themselves were concerned, the
arrangement suggested was brought
| about.
Germany. the principal debtor, OBJ
| tained in addition to diminution of her
debt to lump sum of three billion
markS-tantamount to reduction of
about 80 per cent-a moratorium for
three years.
Believing that this settlement should
become part of general arrangement,
the creditor European powers unani-
mously agreed that in any event the
payment due them in the form of inter
governmental debts would be postponed
until negotiation of a settlement of the
| problem as a whole.
| 1t would indeed be grave If the regime
obtained with SO much difficulty at
Lausanne should have to be recon-
sidered
Would 1t not be equitable if, in the
same spirit of international solidarity,
with a view to consolidating the results
already attained and to permitting COM
pletion of the work already undertaken,
| the Federal Government would accept
in its turn the postponement Of the
payment due December Is?
The imperious necessity wffiAh this
work answers certainly has not escaped
the attention of the Federal Govern
ment.
| In making his moratorium proposal in
1881 the President of the United States
affirmed that the attitude of the Federal
authorities indicated their disposition
| to contribute to re-establishment In the