Evening star., 1936-12-16
ITALY AND FRANCE
EXPECTED TO TALK
DEBTS HERE SOON
Active Conversations Are
Being Held by ENJOYS in
Rome and Paris.
MUSS0LINI is REPORTED
EAGER FOR SETTLEMENT
Paris Also Said to Be Anxious for
Accord in Order to Keep
Good Will of U. S.
BY CONSTANTINE BROWN.

Negotiations for settlement of the
French and Italian war debts are ex-
pected TO be initiated within the next
few months in Washington.
For the time being there are active
conversations between the American
Ambassadors in Rome and in Paris.
These conversations are linking the
payment Of the war debts with an in
tensified exchange of goods between
the three interested countries
President Roosevelt instructed the
two aces" of the American foreign
service, Ambassador William Phillips
in Rome and William Bullitt in Paris
to discuss the question of the settle
ment of the war debts of Italy and,
France as soon as they made contacts
with the respective governments.
Rome Talks Begun in October.
Ambassador Phillips began his con-
verSationS with MuSsolini and with
Count Caleazzo Ciano early in Octo-
Der. He found the head of the Italian
government anxious to get that irk-
some question out of the way. But,
the Italian government pointed out,
it would be futile to plunge headlong
into a spectacular debt settlement
without having first established firmly
the basis OF how these payments could
be resumed.
The Italians were emphatic over
their desire to liquidate the war debts,
but, they said. mere transfer of gold
is impracticable The debt question,
in the opinion of MusSolini and his
financial advisers. could be settled only
by an increased economic intercourse
between the two countries so that the
actual gold transfer should be neg
ligible.
Italy was able to pay the December
inStallment, which is small, but it re-
fused to do so because it feared the
reaction in the United States in case
economic relations did not improve and
Mussolini could not meet the further
more important installmentS.
The administration realized the
SoundneSS of the Italian argument
and instructed Phillips to proceed
with the discussions for a new COM
mercial treaty.
The Rome conversations are now so
far advanced that Ambassador Fulvio
Suvich is in a position to take up the
economic talks officially with the
State Department.
Talks to Be Held Here.
1t is reliably reported that soon
after the conclusion of the new COM
mercial treaty, official conversations
for the settlement of the war debt will
begin in Washington.
The situation in Paris is slightly
different. The United States signed
a reciprocal trade agreement with the
French last Summer.
Premier Blum and the majority of
the Chamber are in favor of an early
settlement of the war debts for differ
ent reasons than the Italians. Musso-
lini needs credits. The French are
looking toward Americas good will
and are willing to go out of their
way and dig deep in their pockets to
obtain it.
The French government believes
the unSympathetic sentiment in this
country toward France is due mainly
| to non-payment of the war debts.
Premier Blum and Foreign Minister
Yvon Delbos have told Ambassador
Bullitt that France is prepared to re-
sumo payments if the total amount
is substantially reduced and a new
mode of payment, requiring less gold.
Is found. Of course, the administra-
ton is not at liberty to make reduc-
tions-this is in the hands of Con-
gresS. But conversations tending to
(See DEBTS, Page A-3)