"Friendly Offer"

From Chancellor of the Exchequer Winston Churchill, in London, Finance Minister Etienne Clementel received a letter relative to the War debt of more than $3,000,000,000 owed by France to Britain.

Mr. Churchill said that His Majesty's Government desired only to collect from the Continent a sum sufficient to liquidate the British debt to the U. S. He said that a definite sum must be paid by France "from her own national resources, fixed with due regard to her relative wealth and taxpaying capacity . . . without reference to reparations."

He suggested that a fixed amount be paid annually and that a further amount be paid on a percentage basis from the German payments received through the Experts Plan.

The letter concluded:

It would, of course, be understood first that all counter-claims by France against Great Britain would be superseded and, secondly, that if and when payments derived by Great Britain from European War debts and reparations were sufficient to provide for the full discharge of British obligations toward the United States oyer the full period of such obligations, including payments already made, any surplus would be used to diminish the burden resting upon Great Britain's Allies.

His Majesty's Government entertains the hope that, if the French Government were prepared to make proposals on the lines here suggested, a settlement satisfactory to both countries might be reached.

Finance Minister Clementel said it was a friendly offer and would receive the close and careful consideration of the Government, though definite action was not envisaged for some weeks. It was considered highly probable that Premier Herriot and M. Clementel would hie them to London for a conference before the matter should be put up to Parliament.

Under the terms suggested, France would probably be required to pay something under a billion dollars to Britain instead of the three billions owing.

The advantages to Britain are not at all clear but, as regards the U. S., the settlement of the Anglo-French debt question will permit France to say exactly what can be done to pay off her U. S. obligations. The rate of payment, if Mr. Churchill's famous pari passu declaration (TIME, Dec. 22) is adhered to, will not, to begin with, exceed the rate at which France is repaying her British debt.