Evening star., 1933-07-30
NATIONS FIND j. s.
| ADVERSE ON DEBTS
No Hope Of Renewed Conver-
sations Obtained by
Diplomats.
BY CONSTANTINE BROWN.

European debtor nations, who have been
calling frequently at the State Depart
ment to ind out the date when they
could resume conversations on the ques-
ton of the reduction Of the war debts.
have been given to understand that
these conversations are not likely to take
place In the very near future.
At the end Of the pilgrimage Of the
foreign statesmen to Washington, 1t had
been announced oflcially that the war
debt conversations would begin some
time in July. When the World Eco
nomic Conference began to show signs
Of weakness, 1t was stated unomcially IN
Warrington that the pourparlers with
the British might begin in August.
Now, Sir Ronald Lindsay has left
Washington on o vacation to England
and the other Ambassadors and Minis
ters who have asked dtscreetly Acting
Secretary William Phillips whether they
may inform their governments to be
prepared to begin negotiations in the
course Of the next month, have been
told that the President viii be away
during most Of August and that there Is
no particular hurry to resume CONVEX
sations which are bound to be at present
even more dincult than they would have
been . few months ago.
Solution More Remote.
The truth Is that the solution Of the
war debt question Is more remote than
ever because Of the failure Of the Lon
don conference.
This does not mean, however, that
the administration Is not studying the
question and preparing to initiate dis
cussions with q number Of debtor
nations.
The President has made 1t clear from
the very beginning that II the United
States can be induced to reduce the
present debts there must be q quid-
pro-quo on the part Of the debtor ma
tions and that quid-pro-quo must repre-
sent certain trade concessions which
would make up for the losses America
would sustain by reducing the debts.
It was hoped, at first, that the Lon
don Conference may be sufficiently
fruitful and a number Of trade agree
ments reached there 50 as to pave the
way for the beginning Of discussions for
the reduction Of debts.
This having failed, the administra-
ton contemplates starting negotiations
tory reciprocal tariff could be reached
The President has made it clear that
reciprocal tariff agreements are possible
only with those countries which can
sell goods to the United States with
out competing with the welfare of the
American people and could in turn ab-
sorb some Of the surplus production Of
the United States.
So far, negotiations to conclude re-
ciprocal trade agreements have begun
with countries which are not In the
war debtor class.
Agreement Dificult.
II Is admitted that It will be difiicult
II not impossible to reach an agree
mert with the British and French gov
ernments. But there is q good pros
pect to come to an understanding with
Italy and Csechoslovakia.
For the time being the main reason
which prevents italy from initiating
discussions for an eventual combined
debt and tariff agreement Is the po-
litical question.
Mussolini is toying with the idea of
being the leader of the pan-European
movement which many European
statesmen consider possible now that
the United States has withdrawn from
any further active cooperation IN Eu-
ropean affairs. Should this move how
ever, fail to materialize, it is probable
that the italian government will be
willing to discuss with President Roose-
velt the question Of trade agreement
which would also involve q substantial
reduction Of the Italian war debt.
OF al the major European powers,
Italy Is in the best position to trade
with the United States.
Italy needs wheat. coal, cotton, steel
and oil. At the present moment she
imports most Of these commodities from
Russia, Hungary, Great Britain, Ger
many and Egypt.
The United States could supply all
better price and with greater credit ia
cilities than any Of the countries which
are selling these commodities to the
Italians today.
Italy's products which could be i'm
ported into the United States without
interfering with the American produc-
ers are wines, olive oil, silks and cheese.
OF course, there Is likely to be a Sc
fious. oposition from the California
wine producers, as soon as the eight
zenith amendment b repealed, against
the free importation of italian wines,
but the experts say that California can
wines at the present moment to satisfy
the needs of the population Of the
United States when prohibition is re-
pealed.
UnofRcially Discussed.
The question of such tariff agree
ment has been unodncially discussed,
and It Is said that Italy would be will
ing to give preference to the American
products, especially If the debt question
could be in this manner satisfactorily
settled. 4
Mussolini Is strongly opposed to de-
fault. But on the other hand, he is
fighting desperate tight to maintain
its currency on the gold standard, more
for social than economic reasons, and
any substantial war debt payments
would force Italy of the gold standard.
When the Italian government made
Its debt settlement In 1924 the italian
made 1t quite clear that
1talyis capacity to pay depends ex-
clusively on the payment Of the German
Is no longer In position to pay the IN.
wants to honor Italy's signature on the
debt agreement.
The result Of this situation is that he
Is inclined to begin negotiations with
the American Government to obtain not
only O market for Italy's products In
the United States, but also to obtain
the 90 per cent reduction Of debt every
European nation Is seeking. It Is be-
lieved that such q reduction might be
possible, II American cotton and wheat
can ind real outlet In Italy.
But there is also a political reason
which might decide II Duce to seek an
agreement with America.
italy has to import about IS per cent
of the essential raw materials. She is
geographically in vulnerable position:
In case OF trouble few marines could
close the Mediterranean to all shipping
going to italy.
For this reason the Italian govern
ment has followed a policy of ccnclud-
ing trade agreements to purchase the
necessary raw materials from countries
v,ith which It can be In contact by land.