Evening star., 1932-07-23
LAUSANNE FAILED
TO RELIEVE CRISIS
Central Europe Still Cropping
in Dark for Way to Eco
nomlc Recovery.
BY NEGLEY FARSON.
BY Gable to The Star

oy OdDIe 10 Inc otaE.
LONDON, July 23.-In the first quiet
aftermath OF the Lausanne reparations
negotiations, the realization that the
urgent problem of Central Europe has
been inadequately and unsatisfactory
handled by the conference is dawning
here.
In the somewhat artificial enthusiasm
over the hypothetical and contingent
settlement of the reparations issues. the
eyes of most people had been directed
toward washington rather than the
Danube. but today there are many
signs that the condition of the Danu-
bian countries is as vital for an orderly
European house as an agreement among
France, Germany and Great Britain
relative to reparations
The Danube problem was virtually
shelved by the Lausanne negotiators
when committee of % from the prin-
cipal interested States was given the
thankless task of preparation of a
scheme for economic recovery. It Is
recognized here that something must
be done Immediately if the complete
collapse Of credit. the standard of liv-
ing and the social structure is TO be
Warded on in Central Europe.
Debts Are Heavy.
People are not forgetting that the
Austrian collapse last year was the be-
ginning of graver troubles, and since
then the four-power conference on the
Danubian credits has failed; Hungary,
Greece and Bulgaria have defaulted
their foreign debts, and Austria has
been preserving an appearance of SOL
vency by an unsatisfactory loan which
does not insure that country against
the prospect of a final crace.l
Furthermore, there are budget def
cits in all the States except Czecho-
slovakla, the peasantry in all the agra
rian States is deeply in debt, imports
are restricted and exchange control is
making trade paralysis worse
The recent loan to Austria under the
League of Nations auspices only pre-
vents the chain credit system from
definitely breaking. There may be ad-
vantages In having Austrian finances
supervised by League officials, but there
is strong feeling here that the scheme
represents further surrender to France,
especially as concerns the political con-
ditions Of the Austrian loan, prevent
ing customs union with Germany for
20 years.
Loans Called Expedients.
More liberal opinion here points out
that loans are temporary expedients
and the scaling down of debts and in
terest is an immediate necessity. 1t
also emphasizes that the great lending
powers are to the small, overarmed
Central and Eastern European States
what the United States is to Europe.
The Manchester Guardian says:
Let the budgets of the Central Euro
pean States be balanced by reduction of
military expenditure on really gen.
erouS scale. A non-aggression pact,
with Soviet Russia, has long been under
discussion among her Western neigh
bors; its ratification is an obvious way
of reinsurance against the possible con-
sequences from such STEP
This newspaper also presses for ac-
ceptance by Geneva of the principle Of
the Hoover reductions to clear away
the main obstacle to genuine recon-
struction of Central Europe Real fear
is manifest here that the new unity be-
tween France and Great Britain may
exclude the economic interests of Italy
and Germany. for any preferential sys-
tenn excluding these powers cannot abb
sorb the agricultural surplus of the
Central European agrarian States.
World Plan improbable.
Removal of exchange restrictions can
only follow a broad-based plan Of re-
ciprocal tariff reductions including all
natural economic markets.
The vicious circle of French policy in
Central Europe IS still operating, with
the result, 1t is believed here, that the
committee established as an ofshoot OF
the Lausanne Conference will be unable
to produce a satisfactory plan for the
world economic conference.
(Copyrght, 1922