On Monday M. Caillaux flew to London and discussed with
the Chancellor of the Exchequer the conditions of the repayment of the. French war debts, and came to an agreement, which Mr. Churchill announced in the House of Commons on Tuesday. The annual payment of £12,500,000, agieed by M. Peret, remains the theoretical standard... This amounts to an abandonment of fully half of our strictly just claims. We hope that France will see here a desire to encourage her to set her finances right. The first stage is an easy. one—E4,000,000 this year— but We are also to keep £2,000,000 of French gold now in London. M. Caillaux evidently pressed hard for the sauvegarde to which the French attach great weight ; i.e., an understanding that if German reparation payments fall short, her payments too shall be diminished. A compromise was reached and letters exchanged providing for reconsideration if the Dawes scheme produces less than half what it promises to France. M. Caillaux returned to Paris where he will continue his demand for special powers, i.e., a free hand, to deal with his country's finance.
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