Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-06-11
EUROPE ALARMED
At GERMAN HINT
OF BOND DEFAULT
Expected to Suspend Pay
ments on Young and
Dawes Plan Loans.
BY the Associated Press.

| by the hSSOSldLGu
PARIS, June 11.-Reports that
Germany may be on the verge of sus-
pending payments on Young and
Dawes Plan loan bonds as well as
commercial debts alarmed British and
French financial quarters today.
Rumors concerning the Dawes and
Young loans arose soon after receipt
of French information that payment
on the commercial obligation had been
suspended.
This news resulted in long talk
at Basel, Switzerland. between Mon
tagu Norman, governor of the Bank
of England, and DR.. Schacht, presi-
dent of the German Reichsbank
Great Britain and France are trying
to get assurances the payments will
be met sssstss sss.s
New Collapse Of Mark Feared.
While French official circles pro-
fessed to see the situation as not
alarming, press comment stressed the
possibility Of "a new collapse of the
mark" unless Germany goes into a
policy of severe financial penitence. q"
Although the outcome of the Nor
man-Schacht conference was not an
nounced, informed quarters here said
France and England certainly will
not permit the consequences of event.
ual non-payment Of interest to be
borne by private holders of these
obligations
Norman and Schacht conferred Just
prior to scheduled meeting of the
Bank for International Settlements.
French officials said they believed
Franco-German commercial relations
give their nation a whiphand over
Germany to compel the continuance
Of payment Of the Young and Dawes
loans interest, and the continued pay
ment Of commercial debts likewise,
but that, nevertheless, they would
avoid too drastic measures which
might hasten the collapse of the mark.
Place Hope in schacht.
They said they considered Schacht
a masterful financier who would keep
the mark artificially stable for some
time, but French government financial
CApCIJS Sd1u J1lC CIld1lCCc WCLC b1ldG
the mark would tumble unless an
act of God rescues" German finance.
France buys about 100000, 900 more
of goods annually from Germany
than she sells her. Their CONNER
cial treaty expired May 81, but was
extended to June 80.
Negotiators will meet June Is to
arrange a new accord and the French
will be instructed to protect their
financial interests.
Schacht assured the French and
the British that interest would be con-
tinued on the 250,000,000 francs
Dawes bonds and the 1000, oo0, 900
francs Young bonds, but the French
intend, said government authorities,
to safeguard the future.
Clearing House Proposed.
Even If the bond interest Is paid, a
moratorium would affect Germany's
$50 900 900 francs in short-term COM
mercial debts to France. Since this
is only one-fourth of Frances adverse
balance of trade with Germany, it
was thought easily possible that a
pdyuicuI COuA0 VIC oil ollScd t1AOusAi
the creation of a clearing house
which would withhold SUFFICIENT
French commercial payments to Ger
man industry to hquidate the German
debts here.
The Young plan 1,000-franc bonds
unexpectedly improved on the Bourse
today and were quoted at 398 francs
after Fridays price of 374. Dawes
plan bonds, which were issued at
1890, closed Friday at 1850 and were
not quoted today.