TOPICS OF THE DAY
MR. CHURCHILL AND FRANCE
MR. WINSTON CHURCHILL has made his first public act of importance since he became Chancellor of the Exchequer by answering the request of M. Clemente], the French Minister of Finance, as to whether the British Government adhere to the principles set out in their previous Notes, and how they propose to apply them. Mr. Churchill restates those principles. with certain small modifications made necessary by the alterations in the situation. To put the thing in a nutshell, our proposal is that we will not ask from France and our other Allies any sum greater than the stun which we have undertaken to pay to America. Further, we are willing to reduce even that amount, which is considerably less than what the Allies owe us, by such amount as we may receive from Germany under the Dawes Scheme.
It will be seen that we thus abandon all claims to be repaid. by the Allies, in respect of money ." had and received " by them, i.e., bona-fide loans, which is over .and above the sums we have promised to pay to America in repayment of her loans to us. We abandon, further, any benefits for ourselves in respect of reparations. That, we may say incidentally, is hardly the kind of ;Irrangcmcnt that would be made by a " usurer nation," as French critics have called us. On the balance of accounts we not only have made nothing out of the Peace settlement, but have borne without help the vast .xpenditure incurred by ourselves. At the same time we have paid our debts to the last farthing. All that we have insisted on is that we shall not be asked to pay i-veiTbody and to be paid by nobody. Mere we borrowed, as in the case of America, in order to lend again, and were thus rather agents than persons incurring debts on their own behalf, we do not even ask for all the money for which we made ourselves technically responsible, but only for a portion. These are the principles on which we calculate the amount which we Jsk France and the other Allies to pay.
When we come to the system of paying we ask that there shall be " fixed annual payments by France," irrespective of receipts from Germany, and that there ,hall be, further, an animal charge on the French share in the Dawes annuities. At the same time we ask that all - counterclaims by France against. Britain shall be superseded. As we have said above, if we should find that on a balance we were getting more out of our Allies and Germany together than we need to discharge the debt to America, such surplus would be used to reduce the burden resting on the Allies. On the whole the proposal seems to have been well received in Paris, though the French appear too often to be looking at the matter, not as a whole, but with a characteristic attention to detail. They are raising, also, a good many points as to what would happen suppose the Germans made default, and suggesting that in that ease it would not be fair to expect France to maintain her payments. The French also seem to be rather perturbed by the idea of giving up any counterclaims against us.
The counterclaim clause was inserted, we arc sure, in order to prevent what English diplomats and English people generally so greatly dislike, that is, the -possibility of friction being created by shadowy claims and counter- claims which have no real life in them but arc •used for what one might call " haunting " purposes by diplo- matists in a difficulty. We want a clean slate with France as, indeed, with every other country ; and here is a good instrument for getting it. We do not doubt, indeed, that this yearning for a clean slate is one of the reasons why we insist on French payments Which shall not depend upon the German payments under the Dawes Scheme. Any proposal to make these dependent would be to give endless opportunities for argument and further negotia- tions. When you are making a settlement of debts, either private or public, the great, the essential, thing is to get a clear and definite figure and not a vague "hanging gale." No farmer cultivates well and no busi- ness is properly conducted unless the overhead outgoings are a fixed and definite sum,. not disputable or able tc be diminished by delay or skilful argument. In the interests of good relations- between the two countries, and therefore quite as much in the interests of France as of ourselves, we ought to clear away all cause or excuse for diplomatic friction.
Into the question of whether we shall gain or lose by receiving gold, or the equivalent of gold, from France, even though we only use it to pay America, we 'cannot profitably enter here. It is sufficient to know that the British public expect and believe that they . ought not to do all the paying and none of the receiving. That being so, it is useless to enter into such refinements as the ultimate effect on the labour market, i.e., em- ployment, of payments in specie, which do not represent any process of barter or exchange. Personally, we doubt whether such payments can have any effect except to give a long holiday to the workmen in the receiving country. But a holiday for workers Means being out of work, and being out of work means being out of pay.
We do not doubt, howeVer, that Mr. Churchill's scheme will be agreed on by the French. Such an agree- ment will help them to make a better settlement of their debt to America than they would otherwise obtain.
If the Agreement goes through it will be interesting to see what the result will be on our own Midget. It looks as if the payments expected from France, quite irrespective of any ultimate effects they may have on our industries, would be to enable Mr. .Churchill to reduce taxation. If so, he Might take .Sixpence off the Income Tax, reduce the tax on sugar, and give us back our old postal rates. That would be a great feather in his cap and would much help the trade revival—assuming we are to be allowed a trade revival and that it is not to be nipped in the bud by putting up the Bank Rate in order that we may have the doubtful luxury of reducing our commercial weight by a Free Market in Gold, that is, by spending our money in buying gold to look at, rather than in buying corn, meat and sugar. • - In this context we should like to remind Mr. Churchill of a point of importance. Whether France pays us • or not, we have got to buy gold wherewith to pay America. Therefore, we do not want dear gold: But what makes things dear is being in extra demand. Therefore we do. not want to stimulate an extra demand for gold. But gold nowadays is in practice only wanted for one purpose, i.e., for the Bank Reserves. (The demand for gold in the arts is unimportant.) Surely, then, this is not the moment for making an extra demand for gold by establishing a free market for it here. It cannot be our policy to set the fashion to all the world of wearing gold, which the bankers of London commend as a comely old fashion, universally adopted by all the best people.
-Our policy is to "give gold a miss" as a rather vulgar, -dowdy and barbarous kind of ornament. • Then its price will go clown and with it the burden ofthe American debt. J. ST. Lou STRACHE'Y,
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