Evening star., 1933-01-22

Il Senate the great controversy
4 \ over the French debt is begin
ming to be cleared up measur-
ably. Thus the remarks OF former Ere
mier Laval provoked by the American
debate have contributed much to eX-
planning circumstances hitherto un.
known to the American public. And
upon these circumstances, obviously, the
French default was based and French
refusal to pay is likely to be continu-
ingly founded.
Out of the fog of public statements
certain facts do emerge clearly. 1t Is
plain that at no time was there on
the part of Laval or the American PreSi-
dent any discussion of cancellation OF
war debts or abolition Of reparations.
The former remained resolved to make
Germany pay, the latter to compel pay
ments by the allied debtors. On the
other hand, each was agreed upon the
possibility of an extension of the mora
torium both as it applied to allied
debts and German reparationS.
1t is clear-and reading of the joint
communique of Hoover and Laval proves
tilis-that the upshot of the Washing
ton discussion was an agreement be-
tween the two statesmen that the
French Premier should 60 home and
arrange for some temporary further
and the American President would
match this by recommendation for an
extension of the moratorium on debts.
Laval, then. had no promise of cancel
lation or reduction of debts. but only
OF further suspension provided the
economic depression continued and
German difficulties were not abolished.
Laval Soon Overthrown.
But this Hoover-Laval understanding
was almost Immediately thrust aside by
a series of events beyond the vision of
the confereeS In the first place Laval
Ras soon overthrown and Tardieu took
his place This represented change
in leadership but not in party control.
But in the Spring Tardieu and the
Right, to which Laval also belonged,
were defeated in the general election
and a Left cabinet headed by Herriot
game into power.
With the coming of Herriot the Brit
lsh intervened decisively. Ramsey Mac
Donald and his associates of the Ma
tional cabinet were not favorable to the
Hoover-Laval conception for a pro-
aongation of the Hoover moratorium.
On the contrary they supported the
British thesis-first expressed in the
Balfour note-that war debts and repa-
rations should be abolished. And they
argued that the time had come for the
surgical operation.
British support of this idea of all
around cancellation was fortified by
events in Germany, where the fall OF
Bruening had taken place and there
was every evidence of the possibility of
Hitler dictatorship. 1t was clear that
Germany was resolved to pay no more
and that the attempt to obtain even as
sent to a further moratorium leaving
the obligation unchanged might have
disastrous results in German internal
politics.
Thus Macdonald. as leader in the
Lausanne Conference. after many post
ponements at last summoned for mid
summer, boldly advocated a general
wiping out of reparations and promised
a remission of debts in so far as these
were owed to Britain. Of course, he
could give no sure pledge for America.
Nevertheless, he did persuade Herriot
that if the French premier would con-
sent to the practical abolition of repair
ations. Britain would stand fast with
France on the American question.
In fact, Macdonald did more. For
over a year French public opinion,
gravely disturbed by German events,
had been increasingly favorable to a
restoration of the entente cordiale
with England. Tardieu had tried to
bring it about when he went to Lon
don in April, but had failed. Now it
was clear that the only chance Herriot
had of obtaining French assent to
Lausanne agreement to abolish repair
ations was to bring home a new pledge
of Franco-British friendship. And that
he obtained in the shape of the famous
consultation pact made at Lausanne.
But although Herriot could and did
follow Macdonald in the matter of
reparations, he could not engage France
to renounce reparations without some
assurance of American concessions in
the matter of debts. Therefore the
whole Lausanne agreement had to be
made conditional upon American ac-
ton German reparations were to be
abolished-literally disposed of by
single bond issue-but only If and
when America agreed to similar re-
moval Of debts.
Far From Hoover-Laval Idea.
1t is evident at once how far this
Eas from any such program as Hoover
and Laval had envisaged. They had
only foreseen the necessity for an ex-
tention of the moratorium. Moreover
the American Congress, which in as
senting to the Hoover moratorium had
declared against cancellation or reduc-
tion of debts, had not ruled out any
further holiday on payments. More
over it is certain that the Lausanne
program had been opposed by Laval
and there are suggestions that it had
been viewed with alarm by the Amer
lean President.