THE WAR DEBTS TANGLE
French Payments Withheld.—The French Chamber on December 14 defeated by a vote of 402-127 the ministry’s resolution in favor of paying with reservations the American debt installment of §19,261,432 due December 15. The Her- riot government thereupon notified the United States of the adverse action, and submitted its resignation, since the question had been put in the Chamber as a vote °f confidence. Under the new ministry of Joseph Paul-Boncour efforts were made to bring about a renewal of negotiations, but the attitude of President Hoover was indicated as unfavorable to a resumption of discussions while payments were still in default.
The decision of France was preceded by an exchange of notes in which France presented more extended arguments for suspension, and the United States replied to the effect that, while negotiations were desirable, there were no evident economic reasons for delay on the part of France in meeting the December installment. Similar action to that of France was taken by Belgium, Poland, and Hungary.
England Meets Payments.—England met by payment in gold the debt installment of $95,500,000 due on December 15. As in the case of France, there was a previous interchange of communications between the debtor and creditor governments, England declaring on December 11 that, while the payment would be made, it should be regarded not as a continuation of the 1923 settlement but as a detached capital payment carrying no implication as to future execution of the settlement. Guarding its position, the American State Department at once replied that acceptance of the payment must not be regarded as approval of any conditions attached thereto.
Negotiations Postponed.—Following the divergent decisions of the European debtors regarding the December payments, President Hoover proposed to Congress the immediate creation of a nonpartisan, semi-congressional commission, which would include also our representatives to the economic and armament conferences, and which would take up not only the question of revision or reduction of the debt settlements, but other allied problems. When, however, President-elect Roosevelt was approached with this proposal, he declined to participate in naming the commission, preferred the plan of dealing with each debtor separately through special agents or regular diplomatic channels, questioned the wisdom of tying up the debts with the armament and economic conferences, and while in no way wishing to hamper the preliminary work of exploration, felt that decisions in the matter of debts could not be reached before March 1 and that earlier participation might unduly commit the new administration. In this situation it was deemed best to postpone the whole problem until the new administration should be in control.
Plans for Economic Conference.— Despite the debt tangle and the unsatisfactory progress in arms negotiations, plans were continued for the world economic conference, the date of which is now tentatively set for next summer. Messrs. Day and Williams, American experts on the preparatory committee, left in December for the next meeting of the committee, which was to resume work at Geneva on January 9. The decision to send the delegates was regarded as indicating some measure of co-operation between the incoming and the outgoing American administrations.
Germany Rejoins Arms Parleys.— Chief outcome of the informal conference, December 8-11, at Geneva of representatives of the five major powers—England, United States, France, Germany, Italy— was the signing of a three-point agreement, on the strength of which Germany finally consented to re-enter the negotiations for limitation of armaments. The agreements were: (1) Britain, France, and Italy declared that one of the guiding principles of the arms conference should be to grant Germany equality of rights in a system providing for the security of all nations; (2) Britain, France, Germany, and Italy declared their willingness to join in a solemn affirmation to be made by all European nations not to try to settle disputes by force; (3) all five nations declared their resolution to work out without delay a convention on arms reduction. Another conference of the European powers was to precede the next meeting of the arms bureau or preparatory committee on January 31. Mr. Davis, the American representative, who had been most energetic in getting Germany back into the arms discussion, was forced to drop temporarily his plan for a short-term limitations treaty registering gains already achievable, and France and Italy were not yet ready to get together on naval reductions.
League Delays on Manchuria.—The League Assembly’s Committee of Nineteen on the Chino-Japanese trouble adjourned from December 20 to January 16, after arranging that in the intervening period still further efforts should be made to get the two countries to agree on some plan of negotiations for settlement. Earlier in the month the League Assembly, meeting in special session to act on the Lytton Report, was faced with urgent demands from the so-called “little four” nations—Spain, Czechoslovakia, Sweden, and the Irish Free State—that the Assembly stand by its commission’s report. “The League Covenant will perish,” declared Senor Madariaga of Spain, “if we permit Chinese Manchuria to become Japanese Manchuria.” A resolution was offered by this faction to the effect that the action of Japan was not justifiable as legitimate defense, that the new regime was made possible by Japanese troops, and that its recognition by Japan was “incompatible with existing international obligations.” Against such counsels, however, the milder “practical” policies of the major powers soon prevailed. The final resolution merely turned the whole question back to the Committee of Nineteen with no judgment on the points at issue. After another week the committee drew up a plan which proposed a conciliatory body composed of its own members plus representatives of the United States and the Soviet Republic. Certain guiding principles were set up, one of which was that neither the old rule nor new rule in Manchuria was to be accepted. The plan, though not published, "'as evidently of such character as to prove unacceptable to Japan, which objected on legal grounds to the participation of two "on-league nations, and reiterated that new state of Manchoukuo must stand as a fait accompli.
Chino-Russian Rapprochement.—Diplomatic relations between China and 4e Soviet Republic, broken since the anticommunist stand taken by China in 1927, "'ere renewed in December. Negotiations to this end were completed at Geneva by Foreign Commissar Litvinoff and Dr. W. Yen, head of the Chinese delegation to the League of Nations, and Dr. Yen was subsequently made Chinese ambassador at Moscow. It was anticipated that the "loser understanding between the two governments might encourage communistic Sentiment in China, and also lead the Soviet government to assume a more resist- ant attitude toward the development of Japanese policy in Manchuria. Early in December in a sharp exchange of notes Russia denied Japan’s request for the extradition of General Su Ping-wen, Manchurian rebel whose army recently took refuge across the Siberian frontier. If funds "'ere provided they would be allowed to enter China.
Kuomintang Session.—The third plenary session of the Kuomintang Central Executive Committee met at Nanking in December, though only one Cantonese Politician was present, former premier Sun-Fo, and none of the important leaders from north China. The first important action was the adoption of a resolution calling for the early formation of a national assembly, as a step toward ending the present party dictatorship and establishing a government on constitutional lines. Otherwise the body busied itself with preparation of long manifestoes to the Chinese people, to the League, and to the world, and resolutions urging the government to the boycott and other aggressive measures against Japan.
Rumors of Northern Empire.—Some suggestion of the possibilities inherent in Japanese control of Manchuria might be found in the December reports that Japan planned to set up soon a new empire in Manchuria and north China, with Henry Pu Yi as emperor. The chief advantage of such a move would be that the apparent restoration of the Manchu dynasty might win the support not only of Mongol leaders in northwestern Manchuria and Mongolia, but also of certain elements in Jehol and the Peiping-Tientsin area.
In connection with the rumored empire, a noteworthy article on Mongolia in January Foreign Affairs points out that while the present leaders in that region are linked with the Soviet Republic as their closest model among the western nations, they are still nominally independent, and hostile toward Chinese domination. They might be drawn under Japanese influence if offered some show of dignified participation in a restored empire.
Anglo-Persian Oil Dispute.—In mid-December Persia, and afterward the British government, applied to the League Council to take up their dispute brought about by the Shah’s recent cancellation of the Anglo-Persian oil company’s concession in Persia. The council set January 23 for the opening of arguments in the case, which has a special interest as the first instance where a major power has sought the aid of the council on a controversy with a small nation. In point of fact, Britain would have preferred reference of the matter to the Court of International Justice, which would have taken it up only in its legal aspects, but Persia was quick to see the advantage of a decision from the council, with its representation from small states and its present chairman, Eamon de Valera. The cancellation of the concession early in November was based on various grievances, notably that the concession was secured by pressure, that no payments were made during the war, that there has been inadequate exploitation of the Persian oil fields, and that by devious bookkeeping methods Persia has received only one-third of the amount due her on the agreed royalty basis of 16 per cent. Persia has received a total of £11,265,000; Britain in the same period has received about £10,000,000 on the shares in the company owned by the government.
India Conference Closed.—The third Round Table Conference on India closed December 24, with work so far completed that the results are now to be drafted in a White Paper and presented to the British Parliament sometime this year. The decisions finally made do not greatly alter the original plan for a federated India, with a bicameral legislature, extension of the suffrage to include even some women voters, and a large measure of self-government. England retains some control of foreign affairs and finance, but in finance the third conference extended somewhat the powers of the Indian authorities. Though certain financial stipulations, especially the establishment of a reserve bank in India, may cause delay, it is now hoped that the new provincial governments may be established by January, 1934, and the federal government set up by the following November.
Schleicher Cabinet in Office.—The German Reichstag on December 9 adjourned until the next year, thus giving the new ministry of General von Schleicher an opportunity to get its program under way before coming to grips with a critical or hostile parliament. The decision of the Hitlerites not immediately to oppose the ministry seems to have been the result of a threatened split within the party. This arose from various causes" including a depleted party exchequer, the slump in the Nazi vote, and dissatisfaction with Herr Hitler’s policy of nonparticipation in schemes of cabinet organization. The latter cause led in December to the withdrawal of Gregor Strasser, Hitler’s right-hand man, and the defection of other Nazi leaders.
The chief policy of the new government, as outlined by General von Schleicher on December 15, was to be the creation of employment, promotion of land settlements, and aid to business. The 40-hour week and union wages will be the rule in the expenditure of the government’s emergency appropriation of $119,000,000 for loans to industry.
New French Ministry.—Following the fall of the Herriot cabinet in France on the issue of debt payments to America, a new government was organized on December 18 with M. Joseph Paul-Boncour, veteran French diplomat and representative in League activities, as Premier and Minister of Foreign Affairs. Though a little more to the Right than the Herriot cabinet, the new government retained 12 of the 17 members of the preceding ministry. None of the new members voted against debt payment when it was defeated in the Chamber.
War Threat on Upper Amazon.—At the close of December four Colombian war vessels were at Para on the lower Amazon awaiting the arrival of other gunboats and troops before proceeding up the river to the Leticia district, in dispute between Colombia and Peru. Colombia was also reported as having concentrated most of her army of 6,500 and some 30 aircraft along the upper Putumayo River on the Peruvian frontier. The region in dispute was ceded by Peru to Colombia in the Salomon-Lozano treaty of 1922, which gave Colombia the port of Leticia on the Amazon and a corridor of approach from the north. Leticia, however, was seized on September 1 by a Peruvian force organized in the district, and it appears altogether likely that hostilities will result when Colombia attempts police measures to regain the occupied territory. Farther west of Leticia is a large area in dispute also between Ecuador and Peru (see map in December Proceedings). To preserve Neutrality, Brazil early in January sent additional gun boats to re-enforce the two already near Leticia, together with a force of 2,000 men and six planes on the Brazilian frontier. The free navigation of the Amazon is claimed by Colombia on the basis of treaties dating from 1851.
Bolivian Offensive in Chaco.—Following a brief Christmas truce in the Chaco, Bolivia launched a strong offensive Movement directed by the German Genial Hans Kundt, former organizer of Bolivia’s army, with a new draft of 20,000 men making a total of 60,000 in the field. The renewed attack in the midst of the rainy season, made possible by a new Bolivian road into the war area, took the Paraguayans by surprise and necessitated a hasty shift back into the Boqueron sector of the troops moved southward for the long-continued, unsuccessful attacks on Tort Saavedra. Bolivia opened her offensive by aerial bombardments on Bahai Negri, chief Paraguayan town on the upper Paraguay River.
Just before the Bolivian attacks, Paraguay ordered her delegate in Washington, Dr. Juan Jose Soler, to return home on the ground that the efforts of the neutral commission offered no promise of a solution. The various proposals of the commission, including the latest on December 15, have necessarily taken into consideration the military situation existing at the moment, and have hence inevitably been unacceptable to at least one combatant, if not both. Apparently the war has reached a stage where it must be fought out either to a stalemate or a decisive victory.
Revolt Plot in Argentina.—A serious radical uprising in Argentina was forestalled in mid-December by quick action on the part of the government, which arrested a great number of anti-government political leaders, including former presidents Irigoyen and de Alvear, and put the country under martial law for a period of 30 days. Colonel Atilio Cataneo, a retired army colonel, was arrested as head of the conspiracy.
France Awarded Clipperton Island. —The award to France of Clipperton Island in the Pacific, made by the Bang of Italy as arbitrator on the basis of an arbitration agreement between Mexico and France 30 years ago, was approved by the Mexican Senate on December 14. The island is described as an uninhabited rock about 3 miles in length by 1 in width, some 600 miles west of Mexico in the Pacific, and of no value save for some slight possibility of its conversion into a naval or air base. The process of transfer to France is still far from complete, for no actual cession of Mexican territory can be made without removing a prohibition of such transfer in the Mexican Constitution.
Salvador Denounces Treaty.—Both Salvador and Costa Rica before the close of 1932 had denounced the Treaty of 1923 providing for the non-recognition of Central American governments established by revolution. Though Guatemala, Honduras, and Nicaragua still adhere to the pact, the withdrawal of one more nation will end its validity for all.