TOPICS OF THE DAY
THE DEBT NEGOTIATIONS WITH FRANCE
TIERE seems to be the maximum of confusion and misunderstanding in regard to the essential issues connected with the French Debt. In the first place, though the talks between M. Caillaux and Mr. Churchill have been called " a settlement," they were in fact nothing but preliminary negotiations. All they amounted to were amicable conversations and an agreement on M. Caillaux's part to submit to his Government certain proposals in the hope that they might prove acceptable. The French Finance Minister was not a plenipotentiary. He was not even a Minister empowered to settle on certain fixed lines. He was only an emissary sent to test the ground and to find out what were our bed-rock terms. The French Cabinet and Chamber have a perfect right to say, " Oh, this will never do."
But that is not all. Though Mr. Churchill was told by the Cabinet that he might still further reduce the immense previous reduction on our legal and just rights (£30,000,000 a year reduced to £20,000,000, and then further reduced to £12,500,000) there would have been no finality even if the French had said, " Done with you." Our offer was conditional on the French ultimately giving to us the benefit of any terms negotiated by them with the Americans. We tried to prevent a situation in which the Americans would be in a position to say to France, " You can and must pay us in full since you have got such easy terms from England. Those benefits bar you from pleading incapacity to pay."
Therefore we demanded a sort of " most favoured nation " clause. In effect we said to France, " Follow the example of Belgium—go to the Ameaicans and settle the payment of your debt with them. We promise that we will not ask you for more than they do." Unfortunately, however, the British-Government, in the official statement of the Chancellor of the Exchequer, turned the arrange- ment upside down. Though it was not so in fact, they made it look like a plan for somehow forcing the hand of America, and rendering it necessary for Washington to be as generous as, or, as they would put it, as foolish as we were. We do not, of course, suggest for a moment that the State Department or the Treasury is so muddle-headed as to take this view. The able diplomats and financiers who control those great offices, no doubt, understand quite well what happened. The American Press, how- ever, with few exceptions, was stampeded by the sugges- tion that we were trying to dictate to the United States, or, at any rate, were conspiring with France to extort concessions ! Really we were only following out the main principle adopted by the Americans. That principle was, and is, that a debt is a debt, and that it can only be properly met by repayment. Understandings with other nations entered into by a debtor nation are irrelevant—unless, of course, the debtor nation in effect goes bankrupt and declares that it must make a com- position with its creditors. When Mr. Baldwin was in Washington he very rightly did not tell the Americans that we could not pay them because we could not get other nations to pay us. Talk of that kind he knew either would be irrelevant or would be a declaration of in- solvency. He had come to pay, and he only asked " How will you take it ?
The Americans, if they think the matter out, will see tin- t we have in reality done nothing whatever to prevent them saying to France, " We must ask you not- to bring in the British or any negotiations between them and you. All that is nothing to us. The British did not make yout failure up to date to pay them a ground for indulgence, nor must you make, any proposals you have . extracted from them a factor in our arrangement. Debts are debts. Remember further that if you are to be allowed to bring in outside considerations, so must we. If a man makes a composition with his creditors, they rightly insist on controlling his actions, and on knowing how, why and where he is spending his money. If you pay us what we tell you we will accept as a full discharge, there is no more to be said. In that case it would be an impertinence to cross-question you. If, however, you go into external considerations, we shall have to ask, (1) Why do you maintain so great an Army ?- (2) Why are you engaged in what seem to us to be expensive Imperial- istic schemes in Syria and in Morocco ? (3) Why have you lent money to the Little Entente to be, spent an military preparations ? (4) Why did you engage in action so costly and so risky as the occupation of the Ruhr and the attempt to break up .the German Empire by inciting, or, at any rate, favouring, insurgency in the Rhineland ? "
That, in plain terms, is the American position. We do not presume to challenge it. But surely we may say in effect, " You most properly claim the right to deal with France without asking our consent. Similarly we have a right to deal with her without asking yours. You cannot forbid us to say what we are now saying to France, ' Come to terms with America, and we will ask you no more than she does' As you are richer and less highly taxed than we are, you surely cannot complain of our saying this."
We have only one word to add. How was it that when we were sketching our very generous proposals to France, we did not ask for an assurance that the money we re- mitted, i.e., our money, should not be spent in raising huge armies of black soldiers, and on loans for armaments to the minor allies of France in the North and East of
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