FRANCE’S DEBT CRISIS

Sun (Auckland), Volume III, Issue 703, 1 July 1929, Page 9

FRANCE’S DEBT CRISIS

CAUGHT ON THE HORNS OF A DILEMMA AMERICA REFUSES TIME (Australian and N.Z. Press Association) (United Service) Reed. 9.40 a.m. PARIS, Sunday. The American Government has refused the French Government’s request for a postponement of the payment of the debt of £80,000,000, which is due for war stock bought after the armistice. Cabinet has been summoned to meet immediately. A political crisis is feared. The Chamber of Deputies will hold a debate on the ratification of war debts on July 9. It is recalled that shortly after the war, America offered to sell France all the war material the United States then had in Europe for £ 50,000,000, stating that if it were not sold it would either be sent to America or destroyed on the spot. France badly needed much of the material, therefore M. Klotz, then Finance Minister, who is now in prison on charges of fraud, concluded what proved a bad bargain for France. America last month agreed to absorb this £80,000,000 into the FrancoAmerican debt-funding agreement, known as the Mellon-Berenger agreement, provided that France ratified the agreement by August 1. France wants to see the Young plan adopted first, but America declines to wait. France faces another complication arising from the fact that under the London agreement of July, 1926, debt payments to Britain must not be inferior to those to America, therefore if France pays America £ 50,000,000 it must pay Britain a similar amount^ No doubt a way will he found out of the impasse, but it is not obvious at present.