Evening Star Newspaper, July 1, 1931, Page 5

THREE MAIN POINTS BLOCK DEBT PLAN U. S. Officials Remain Opti- mistic, However, Despite Difficulties. BY CONSTANTINE BROWN. There are three salient points which render an agreement with France cn President Hoover's proposed intergov- ernmental debt and reparations holiday difficult. These are: (1). Length of time over which the reparations amount Germany foregoes this year will be spread, (2). Whether Germany will be re- loaned by the Bank of Internaticnal Settlements the whole amount of the unconditional payments, and, (3). Guaranty fund. High administration officials explain that the two first questions interest the United States directly in2smuch as they affect the spirit of the Hoover plan, while the third interests only the signa- tories of the Young plan, but is never- theless of paramount importance. Frank Statement Wanted. In high administration quarters the need is felt for a frank and open ctate- ment of the entire situation. It is de- sired that not only tho American peo- ple, who are called to make the great- est sacrifices if the Hoover plan is ac- cepted, should know what i3 going on, but also the rest of the world should know on whom the blame should be laid in case that the plan fails. Regarding the question of the length of time over which the postponed an- nuities shall be paid, it is authoritative- 1y stated that the administration is will- ing to discuss the matter with an open mind. When the French suggested that the $100,000,000 owed by Germany this year should be paid within a year, the President replied that the whole pur- pose of his plan would be defeated, be- cause it is inconceivable that within 12 months after the severe crisis Germany is undergoing, she should be in a posi- tion to pay more than $200.000,000. The basic idea of the Hoover plan 1s to give Germany plenty cf time to re- cover,and for this reason Secretary of the Treasury Andrew W. Mellon sug- gested to the French cabinet a period of 25 ¥ars over which the postponed payments should be refunded. The French came back with a propesition of five years, but indicated that they were willing to consider two extensions of five years each in case Germany's re- covery should not be as rapid as ex- pected. On this subject, however, the administration has hopes that an ar- rangement may be reached. Loan Serious Question. Regarding the question as to whether Germany should be reloaned the entire amount she is supposed to pay into the Bank for International Settlements, the situation is much more serious. After having won the point that Germany, in order to safeguard the spirit of the ‘Young plan, should pay 500,000,000 gold marks ($119,000.000) into the bank, the French have sprung a surprise on the United States. They suggest that Ger- many should be reioaned only a por- tion of the amount paid, while another portion should be loaned to Central European countries. ‘The French do not mention whether those loans should be given to Ger- many's former allies or to France's political catellites. The truth is that the whole of Central Europe is always eager for loans, and there is nothing in the French note to indicate whether the sums paid in would be used for political or economic loans. The crux of the situation is that while it was at first understood that Germany would be reloaned the whole amount the moment she paid it into the bank, there is now an element of uncertainty as to what is going to hap- pen to that money. This is entirely against the spirit and the purpose of the Hoover plan, and one can safely say that this suggestion will not be accepted by the American Govern- ment. Washington cannot _consent that any part of the German money should go to other nations. It pointed out to the French government very .{clearly that the United States was fully i #aware of the distress which prevails in some of the Central European States, bu that in case of acute distress the major nations, including America, !~ mould get together and help them out. Assured Against Hardships. Such was the case in the past and here is no reason. Washington says, Piwhy the same thing should not be done in the future. As a matter of {fact when Rumania a week ago pointed yout that under the Hoover plan she “would suffer a serious financial loss, Secretary of State Henry L. Stimsqn assured the Rumanian = Minister @t Washington Charles A. Davila, that we would see that his country should not suffer any hardships from acceptance of the President’s proposal. Regarding -the question of the guar- anty fund, which dces not concern us directly, a little explanation is neces- gary. At the time the Young plan was negotiated France succeeded in get- ting for herself the largest slice of the unconditional payments, the other na- tions being given a very small part. In case of a moratorium they would get almost nothing and therefere there was an agreement that in case Germany availed herself of the privilege of de- claring a moratorium, PFrance would immediately pay into the Bank of In- ternational Settlements 500,000,000 marks ($119,000,000), which would be distributed among the different nations in proporticn as they received annuities. Which means that France in that year would not receive the whole 500,000,000 marks, but would pay the other nations ‘whatever is due to them. The French have informed us now that at any time before this year's un- conditional payment is paid, if Ger- many should declare a mcratorium, France would not be compelled to put the 500,000,000 marks in the Interna- tional Bank, as provided by the Young plan. Instead the unpaid balance, that is, the part reloaned to Germany this year, should be put immediately by Germany into the bank to fill up the guaranty fund. This is a matter which the French must arrange with the other creditor nati>ns, since we are not signatories of the Young plan, but it is a matter on which the French stand perhaps more strongly than on anything else, No Time to Quibble. There has been a good deal of talk, especially in France, about the dicta- | torial manner in which the United States made the debt holiday proposal to the nations of Europe, particu arly to France. It is likely that some peopi ghould have found our manner not su clently dilatory and consequently not in accord with the old-time diplomatic usages. But this, according to high Gevernment officials, is no time to quibble about forms and words. President Hoover, it must be remem- bered, had been informed at the outset that the whole economic structure of Germany might collapse within a few days. On Saturday, June 20, he was dnformed that the Reichsbank was in such a bad shape that it might be com- pelled to declare a moratorium on thz following Monday. President Paul von Hindenburg's letter, which Mr. Hoover received on the same Saturday, gave an honest and extremely gloomy de- scription of Germany's economic and political situation. Not only was Germany's economic structure in danger but a revolution seemed Inevitable if her finances were Foreign banks as iduals were taking their money away from Germany and were sending .it to Holiand, England and Switzerland. Germany was on the eve of an unparalleled ummphg_ and mulfion demanded immediate der such circumatances one’ could | THE EVENING ‘Text of Laval’s Address French Premier Says Nation Has Accepted Hoover Debt Plan, but Declares Some Reservations Necessary. By the Associated Press. PARIS, July 1.—The text of Premier Laval's address to the Senate yesterday follows: “The situation is delicate—more deli- cate than it ever has been since the war, and I thank all those speakers who have declared that their only view is to strengthen the position of the French government in the discussions which now are gding on. “The reparations must not be called into question, and the Young plan and The Hague accords must be main- tained.. They still represent a definite and complete settlement of the repaga- tions problem. “The present economic crisis is grave, notably for Germany, and the German government turned toward the United States. “Mr. Stimson, the American Secre- tary of State, informed our Ambassagor, M. Claudel, that President Hoover was preparing to issue a message to the | world. Two hours later that message was published. Could Have Refused. “One cannot complain that the Prench government was left out of the American President's decision. “We have accepted Mr. Hmv",f pro- posal. The Senate should know that all countries have adhered to that proposal. I had confirmation of this last night by letter from Ambassdor Edge. “If we had wished to score a facile success in our assemblies it would have | sufficed to reply to President Hoover | with a refusal. But what would have happened on the morrow? “We have not refused, but we cannot accept without reservations. “Henry de Jouvenal said that America is the creditor and France a victim. Certainly Prance is a victim, but Amer- ica is not with us as creditor. have been for a time hardly expect the President of the United States to start worrying about diplomatic forms or to bother about the sensibilities of European politicians and diplomats. He made his announce- ment and the result was better than ex- pected. A wave of optimism and confi- dence which saved Germany from dis- aster followed, and Germany was tem- porarily, at least, saved. Know French Attitude, In all the dealings with the French, neither thé President nor his collabora- tors have forgotten for one minute the state of mind of France. Officlals in charge of the negotiations know France well and know how much she has suf- fered from invasions and devastations in the last 60 years, and how she has | bled during the World War, when the flower of her manhood was killed or maimed. It is fully realized here that France is worrying more about the dan- gers she may incur again if she does not take the proper measures to protect herself against similar recurrences All these facts have been fully taken into consideration by the President and his assistants. In order to prevent a catastrophe in Europe, of which France would suffer much more than Great Britain, Italy or the United States, Mr. Hoover, therefore. decided to act promptly. He put before the French a proposition which even France's allies found very acceptable. It is & purely business proposition. For_this reason. State Department | and Treasury officials think it incon- ceivable that the French would turn it down and prefer inevitable chaos in Furope to an arrangement whereby they can only win. This is why, in spite of the present difficulties, high Washington officials remain reasonably optimistic and hopef'! that an agree- ment can still be reac.ied in the course of the week. o (copyrisrt, . ladded. where there is less cause for it. some misunderstanding. Public opinion was deceived. If the publication of President Hoover's letter was a little 3::rupt it was solely to avoid divulga- tions. “We never have been the victims of any maneuver. The country ought to know that, however that may be, we made reservations called for by our | special situation and the importance of those reservations must not be ignored for they are real and effective. In making them we are conscious of hav- ing done our duty. Recall Own Sufferings. “In the negotiations which we will continue tomorrow we will be inspired by a legitimate care for the dignity of France. We will recall what we did in 1926 to overcome a crisis analogous to that from which Germany suffers. We recall our sufferings and the bur- | dens which resulted for us since the war. “In the, circumstances through which we are passing our diplomatic agents should not be deprived of the country's confidence. The attitude of our dipio- mats cannot be criticized, and yet we have been surprised by events bath in the case of the Austro-German customs accord and of. President Hoover's letter. “To avoid similar surprises, we con- sider it fitting that the German and French governments enter into full and frank conversations. Those conversa- tions will take place shortly and I am confident they will yield results. “During these delicate negotiations I cannot make any other disclosures and you will understand my reserve. The government more than any one is mind- ful of the national interest. It needs strong authority and to strengthen ‘lhnt authority I expect a massive patriotic vote from the Senate.” 0CHS SAYS FRANCE ONLY DEBT PLAN FOE Publisher Declares Rest of Europe Enthusiastic About Hoover Proposal. By the Associated Press. NEW YORK, July 1.—Adolph S. Ochs, publisher of the New York Times, returned today from a trip to Europe declaring President Hoover's “timely proposal for a year's holiday in the payment of intergovernmental debts was enthusiastically acclaimed and en- dorsed everywhere except in France where the fear of Germany's recovery in strength and power is an obsession that pervades all classes and political | parties.” | “PFrance,” Mr. Ochs said, “has the |largest army in the world—about five | million—and also the best of modern military equipment. She is in an im- | pregnable financial position. * * *’ | “It seems to be the policy of Prance to be prepared to take care of herself if she cannot be assured by England and the United States of security from aggression,” Mr. Ochs continued. “All this is causing doubt and suspicion toward France and creating some {il will throughout the world that is be- | coming quite articulate and disturbing to the sfcere friends of France in other countries.” ‘The publisher said he was greatly im- pressed by the fortitude with which Europeans are adjusting themselves to | economic conditions. There is apparent- ly more gloom in the United States, added. where there is less cause for it. Rare Rosebush B: Bargain Thursday, July 2nd, Only Big sale of three out- standing roses. These roses are three-year-old hardy specimens. Monthly bloomers. Premier Supreme, red Columbia, pink Rapture, salmon cream 22¢ e 3« 60c No such roses ever offered at this price before. NO PHONE OR C. O. D. ORDERS on rosebushes. We cannot deliver these rosebushes at this price. NOTICE: We furnish B town purchasers. eetle Certificates for out-of- BALDERSON COMPANY, Inc. 610 Pennsylvania Ave. N.W. SAVE MONEY! Telephone NAtional 9791-9792 INSTALL NOW American Radiator Co. First Quality = HOT WATER HEAT SPECIAL SUMMER TERMS . .. O CASH DOWN TAKE 3 YEARS TO PAY Complete for 6-Room House 325 This price includes 18-in. e [} ';fl?'"" 300 ft. radistion, goarant Install NOW. ~ i Give us your order NOW. Start paying tember 1. Then pay the bill in 3 years. Let our Graduate Heating Engineers give you complete facts about this plant. We're glad to do it ... no obligation. Call or write us NOW. American Heating Engineering Co. 907 N. Y. Avenue National 8421 THE AVENUE AT SEVENTH N No Comparative Prices ... BUT! Compare The SAVINGS! You can judge this Sale by . Tropical Worsted Suit Values! uit values. 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