The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, JANUARY 8, 1931. FRENCH WAR BONDS.

Hokitika Guardian, 8 January 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, JANUARY 8, 1931. FRENCH WAR BONDS.

Thkjho lias been mention in the cables of late, of English bond holders of the French War Loan, appealing for special consideration from the French Government. The Otago Times in referring to. the matter says that it is probable that it is without much expectation of securing satisfaction that the British Government had addressed a Note to France seeking consideration of the claims of the British hold of the French war loan bonds. Yet the moral claim of the bondholders is undeniably strong. It can never have been contemplated by the British

investors in. the loans that they would be repaid cne-lil'th only of Hie amount of their investment. Yet the stabilisation by M. Poincare of the franc at twopence, which is one-fifth of the pre-war value, has the effect that, on the basis of the present value, the British, holding of about £‘50,000,G00 of the war loans becomes reduced to 20 per cent, only of the issue value. [Moreover, the British investors brought in pounds, not in francs, and it was assumed by them that they would be repaid in pounds. Their argument is supported by the fact that when France was a lender, as she was to Jugoslavia and Brazil, she claimed successfully that payment- should be made to her nob at the paper franc raie hut in gold francs. There can he very little substance in the French contention that the loans, which were subscribed in Great Britain for the war purposes of France, were understood to be in paper francs. It is further argued, however, on behalf oi the borrowers that the value of the security they offered must respond to the fortunes of the paper franc. This argument may not be so invalid as the other, and the question in controversy is complicated by the fact that French investors in the war loans of their country are being repaid in paper francs—that, further, a considerable quantity of the securities lias been bought in by the French. Government and destroyed —so that a submission to the claim of the British bondholders would involve the extension of preferential treatment to the foreign investors, On. the strict merits of the transaction, it might- reasonably bo supposed, oven if it be granted that the investment was made in francs, that the franc was a. well-defined monetary unit and that the arbitrary depreciation of it later on did not affect the rights of the investors in the loans to be reimbursed in the franc of the value at the time the loans were issued. Since the views of the Governments are in conflict on the matter, the case would seem to he clearly one that should he referred t.o the arbitration of international jurists, and it is likely that that is the course that is proposed by the British Government.