Evening star., 1933-05-08
FRENCH TO DEMAND
DEBT MORATORIUM
BEFORE PAYING j. s.
Cabinet Takes Flat Stand
Against Action With
out Guarantee.
SURTAX MAY BE PLACED
UPON AMERICAN GOODS
Lump Sum Settlement Also Talked
as Session Weighs Herriot
Report on Farley.
By the Associated Press.

By the Associated Press.
PARIS, May 8.-The French cabinet
today unanimously took a fiat stand
against the payment to the United
States Of the defaulted interest due last
December Is without guarantee Of
moratorium on the June is debt pay
ment.
This decision was taken In q three
hour cabinet session which canvassed
unofnciaIy the suggestion for lump
sum settlement of the war debt to
America and other problems.
The official communique issued after
ward made no mention OF the debt
question, but it was learned from re-
liable source that there was no diver
gence Of views on this subject.
The cabinet came to this conclusion
after a thorough examination Of the
report presented to Premier Daladier
by Edouard Herriot, who recently re-
turned from Washington, with M. Her
riots observation.
The communique announced only
that conclusion on certain subjects IN
connection with the Herriot- Roosevelt
talks are to be taken later.
Surtax Considered.
The cabinet which met at the minis
try of war Is understood to have ex-
amined among other plans the ad-
visibility of the imposition OF q surtax
upon American goods.
The cabinet also reviewed the finan-
cial and commercial outlook. There
x,,a. M chopoo IN thu yoreui011s decision
that the franc is safe, in view Of the
marked increase in the Bank Of
Frances gold reserve and the fact that
the French gold coverage amounts to
95 per cent.
Any lump-sum war debt payment Is
apt to prove bit more than France Is
willing to swallow at this time.
A threat to continued adherence to
the gold standard is the great danger
political and financial quarters see In
any such arrangement for disposing OF
war obligations to the United States
A plan, which is understood to have
been advanced in q communication from
the French representative at Washing
ton, and now before the French gov
eminent, is reported to propose:
l. One-third payment In gold.
2. One-third payment In bonds i'm
mediately negotiable.
8. One-third payment In bonds to
be issued through the Bank for Inter-
national Settlements at such time as
the bank desires.
Silver Acceptable.
A provision that part payment IN
silver would be acceptable also was
understood to have been made.
As the cabinet met today, the lump
sum payment plan was widely discussed.
Part of the press held that gold pay
ments would prove too much drain on
reserves.
The Excelsior, independent politically,
said a definite settlement seemed dill
cult until something Is established about
the values of currencies and the pos
sibilities of international transfers.
The French debt to the United States
totals 4,025, ,000, 900 principal and ST.
100000 interest. France has more
than $3,216,000, 900 in gold, the second
largest supply in the world, and this
provides II per cent coverage OF the
franc.
It was stated by most commentators,
however, that the proposals was to
wipe the debt slate clean by only par
tial payment of the principal and can
collation. of the interest.
Gold Reserves Increase.
A marked increase In the Bank Of
Frances gold reserves was expected to
be shown in Thursdays statement. Hol-
land and Switzerland have been ship
ping considerable amounts here in the
fight to maintain the gold standard.
French gold already provides 95 per
cent coverage for currency circulation.
STAND DISAPPOINTING.