Evening star., 1936-03-29
BY HERBERT WRIGHT,
Professor Of International Law. the c

Professor OF International Law the Cath
olic University of America.
rs THE offer Of Greece to make
partial payments on its debt 20
the United States the camel's nose
Il under the tent for reconsidera-
tion of the whole question of inter
governmental debts? Is it the prelIN"
to another European war? Will Il
United States be called upon to uE-
derwrite the expenses of the sanctions
invoked against Italy in its dispute
with Ethiopia?
Many discerning observers see such
possibilities in the Greek offer, and It
may therefore be well to examine tt <
factors involved in such possibilities.
The whole question of war debts vas
complicated by the Hoover one-vear
moratorium of June 20, 1881, and by
the fact that the debtors have always
maintained, notwithstanding the con-
sistent and persistent opposition of the
United States, that there is an abso-
lutely essential connection between war
debts and war reparations. All the
debtors accepted President Hoover;
moratorium except Yugoslavia. which
suspended payments outright. The
moratorium, however, was only STOP
gap measure and did not at all sore
the problem of financial unrest.
Lausanne Conference Held.
On June 16. 1882, the representa-
tives of Germany, Belgium, France,
Cra0f prito Tfolxy ND To of
Lausanne to consider measures for the
improvement of the world economic
situation, one of the main factors in
which was the question of German
reparations. The date originally pro-
posed had been January, but delay was
caused by negotiations between Great
Britain and France, who had strongly
divergent views on the question of
reparations. The United States was
precluded from association with the
conference, since the Congress in De-
cember had passed a resolution that
cit was against the policy of Congress
that any of the indebtedness of foreign
countries to the United States should
be in any manner Cancelled or de-
duced."
On July 8, it was announced that an
agreement had been reached abolish
ing reparations, subject to the delivery
by Germany to the Bank for Interna-
tional Settlements of S per cent re-
deemable bonds with l per cent
sinking fund.- to the amount of 3.0O0,-
100000 gold marks ($714 ,286, ,00O). The
bonds we're to be held by the bank as
trustee for three years, after which
they might be negotiated and placed
In the open market at a price not lower
than 80 per cent, though it was never
expected that these bonds would be
issued in full.
The agreement was hailed as the
beginning Of new epoch in postwar
history, but it was soon (July 14)
revealed that the creditor powers on
July had joined in separate gen
tlemen's agreement" to the effect that
the settlement would have final effect
only after ratification by the creditor
powers and that such ratification
would not follow until satisfactory
settlement has been reached between
them and their own creditors" that is,
the United States. In case no such
settlement could be arranged, "the
legal position is that which existed be-
fore the Hoover moratorium"
Lausanne Agreement Dropped.
The Acting Secretary of State of
the United States, on July 9, while
expressing his pleasure that, in reach
ing an agreement on the question Of
reparations, the nations assembled
have made a great step forward In
the stabilization of the economic sit
uation in Europe" promptly gave
notice that ION the question of war
debts owing to the United States by
European governments there is no
change in the attitude of the Amer
lean Government" which was that
war debts and reparations were two
distinct questions. The Lausanne