Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-10-12
Plan Approval
Is Expected
Today.
7 POINTS BASIS
OF RESTRICTION
Economists Study
Suppression of
Export Trade.
BULLETIN.

1C4Nc OtIObSA 4S w ~ AAAS
Union of South Africa delegate to
the League of Nations was report
ed today to have recommended the
investigation of the possibility OF
League powers breaking diplomatic
relations with Italy.
BY the Associated Press.
GENEVA, October 12-The finan-
cial Subcommittee of the League of
Nations general staff for sanctions
today took the first definite step to-
ward cutting Italy of the world pay
roll
1t decided to recommend the i'm
mediate discontinuance of all loan and
bank credits to Mussolini's govern
ment. In addition it appointed a
subcommittee headed by Demetrios
Maximos of Greece to consider further
steps in that direction.
In view Of yesterdays unanimity
on the arms embargo. it is regarded
in League circles as a foregone con-
clusion that the committees recon-
mendation will be adopted by the fully
represented General Staff Committee,
probably later today.
Basis of Resolution Voted.
The Financial Subcommittee voted
that the basis of the formal reso-
luton for the financial isolation OF
Italy should forbid the following:
l. Opening of credit to Italy in any
foreign country.
2. Authorization Of public issue
by Italy in foreign countries.
3. Authorization of a public issue
by an individual or legal entity ma
tional of Italy or of either acting as
an intermediary In one of the Leagues
states.
4 Opening Of bank credits in favor
of Italy in any League country.
5. Opening Of bank credit without
any commercial character in favor of
any Italian individual or Italian legal
entity or of either of them acting as
Italy's intermediary in one of the
Leagues states.
6. Opening Of credits similar to those
referred to in paragraph but having
the appearance of a commercial credit.
Z. Opening Of normal commercial
credits. The exact application of this
Introduction has not yet been worked
out by the committee)
All the above interdictions were pro-
posed last Spring by experts named
to recommend methods of financial
pressure against treaty violators
Members of the Financial Committee
said they had been accepted as the
basis of financial sanctions against
Italy, with the understanding tina;
they would be applied progressively.
The report on which today's pre-
liminary decisions were based stated
that the measures prohibited in para
graphs l. and 3 appear easy of en-
forcement. The report expressed the
opinion that interdictions 4, 5 and 6
seem more difficult and uncertain OF
application because "in order to be
effective they require a somewhat
strict control over the activity of
credit institutions"
Referring to the last-named inter-
diction for the opening of normal
commercial credits, the report said
This prohibition would tend to bring
about an almost complete stoppage of
trade in the country concerned"
This Introduction, applied to the
present situation, experts said, risked
the stoppage of Italy's trade.
Official German quarters announced
that the Reich was sending a check
to the League for 100000 Swiss
francs to settle the dues Germany
owes.
The Third Reich leaves the League
officially October 21-two years after
the date Of its resignation notice.
Juridical Obstacles Removed.
Some jurists commended Germany
could not leave the League juridically
until she fulfilled all her obligations
under the covenant.
Payment of the dues, some of
which were in arrears, removed any
juridical obstacle to Germany's with
drawal.
An Italian spokesman, commenting
on the lifting of the arms embargo
from Ethiopia, said bitterly this meant
the black empire could slay Italians