Cream & Gold

Glowing with splendid plans to help five River Danube countries with a round population of 62 millions.* kindly James Ramsay MacDonald and such close Cabinet friends as his Foreign Secretary. Sir John Simon, lavished hospitality last week on the Frenchmen who had made the plans.

Good fellows, these guests from Paris, the Britons thought. Short, witty, cigar-chewing French Premier Andre Tardieu had never turned up in more engaging fettle. He and his huge, long-boned Finance Minister, Pierre Etienne Flandin, not only pleased Scot MacDonald by the crystal lucidity of their plans for rescuing Danubia from near bankruptcy but provoked him at a midnight session over Scotch and cigars to roars of midriff mirth which did his morale a world of good. Facing newsfolk just before M. Tardieu dashed back to Paris, dignified Scot MacDonald beamishly confessed, "We did overflow a bit at times. I might say the Danube was in such full flood that it overflowed its banks. In fact, it would be difficult to name any topic of world interest today which was not touched upon in the course of our various talks. There was a dinner last night at the French Embassy, where the conversation was free & easy ! Today I lunched with them all here in Downing Street, after which there was a sort of smoker which was in no sense a Quaker meeting."

Significantly the French Premier was curt as he caught the night train for Paris. With French elections looming May i, he left his big Flandin to attend to what was going to happen in London, spent a bad night on the Channel and was up at 6 a. m. to dictate the whole way to Paris.

Danube Conference, Sympathetic London pressfolk were distressed to see their Prime Minister's optimism wither and fade a few hours after he had made welcome, in the cream & gold Cabinet Room at No. 10 Downing St., the members of the Danube Conference at which Britain, France, Germany and Italy sat in. Plainly, spade-bearded Dino Grandi, snapping-eyed Italian Foreign Minister, was smoldering with anger and so was Germany's Dr. Bernhard W. von Buelow, a nephew of the late great Prince & Chancellor. Honest Scot MacDonald was made from the first to feel that his prior conversations with Premier Tardieu had been in the worst possible diplomatic taste. Down the tense conference table the Prime Min- ister's rich voice rolled, "Something must be done immediately or Austria and Hungary will go back to ruins!"*

French Plan, To Mr. MacDonald's extreme discomfiture France's Flandin leaned his large elbows on the Cabinet table, rested his massive jowls upon his fists and left the defense of France's plan for saving Danubia largely to the British. The plan: 1) loans to Rumania, Czechoslovakia, Jugoslavia, Hungary and Austria totaling $40.000,000 or about 65-c- to each Danubian man, woman and child; 2) exclusion of Bulgaria (Germany's ally 1914-18) from this rescue party, although Bulgaria is on the Danube and in dire straits; 3) lowering inter-Danubian tariffs by 10% to 20% all round, to stimulate trade recovery.

Loud, prompt, irate were the objections of Italy's Grandi and Germany's von Buelow. They argued that "in fairness" Bulgaria must be rescued too; they complained that, since most of the $40,000,000 would have to be loaned by France, this lending would be "political" and would extend French power down the Danube; finally they called "unworkable and impractical" the proposed inter-Danubian tariff slash.

"Very well, Gentlemen," said big Flandin, "if you think 10% is not enough. France consents to a 50% tariff cut."

That was not the point at all, hotly retorted Dr. von Buelow. Quoting statistics by the ream to Scot MacDonald (who dislikes them), he contended that inter-Danubian trade, no matter how much it may be stimulated, cannot put Danubia back on her feet. It is Danubia's trade with Germany and Italy which must be encouraged, argued Dr. von Buelow, for that is of vital magnitude--four times larger than the trade of Danubia with Britain and France.

"It's the Finish!" Obviously if the Danubian states attempt to grant each other special tariff favors they will be violating the most-favored-nation clauses in their trade treaties with the Great Powers. Such violation Britain and France were ready to sanction last week, but on this point Germany and Italy made their strongest stand, wrecked the Danube Conference then & there if they had not already wrecked it.

"It's the finish!" cried Signer Grandi, quitting Downing Street. "We've all done our best, but it's the finish!"

"The situation," heavily observed Dr. von Bulow, "was too complicated."

Said big Flandin, "Some powers -- and I am not referring to Great Britain -- do not seem to appreciate how serious the Danubian situation really is. ... Something must be done immediately to prevent a general collapse in that area."

Scot MacDonald, who had used these very words to exhort the Conference to action, had nothing to say to the Press, looked haggard.

Europe v. U. S.? Not the Danube Conference but informal talks about Reparations and War Debts among Host MacDonald and his Great Power guests were chiefly vital last week to U. S. citizens. Specifically, were the Allies and Germany groping toward a common basis from which Debtor Europe may defy Creditor America at the Lausanne Conference in June? Omens of the week:

P: In Berlin the semi-official Wolff's Telegraph Bureau released news of a Europe v. U. S. agreement at London (possibly an incautious leak from the German Foreign Office).

"The Lausanne Conference will bluntly proclaim," stated Wolff's "that Reparations are at an end, so far as Europe is concerned."

P: Simultaneously the German budget estimates for next year were released by Finance Minister Hermann Dietrich with Reparations payments omitted. "This omission does not mean that Germany does not want to pay," said Dr. Dietrich. "It means Germany can't pay!"

P: In London the Prime Minister did not deny widely printed reports that he approves in substance a scheme put forth in book form last week by Sir Arthur Salter, recently resigned as Director of the League of Nations' Economic Section.*

Sir Arthur would: 1) extend the Hoover Moratorium into "a Moratorium long enough to cover any probable period of the Depression and a subsequent period of recovery"; 2) preserve the formalities of Germany's obligations to pay the Allies and their obligations to pay the U. S.; 3) slash these obligations by reducing them to the same drastic extent that world prices have fallen; 4) accept Germany's payment of her slashed obligations chiefly in dividends from additionally created common stock of the German State Railways and other basic industries. In years when no dividend is paid, according to Sir Arthur, Germany would be automatically relieved to that extent.

P: In Rome, finally, it was Signer Benito Mussolini who caused his Fascist Grand Council to adopt last week a pungent manifesto exhorting the Great Powers to "renounce Reparations and cancel War Debts !"/-

* Rumania 18,000,000

Czechoslovakia 15,000,000

Jugoslavia 13,000,000

Hungary 9,000,000

Austria 7,000,000

*From which they were saved half a decade ago by huge loans under League of Nations supervision.

* RECOVERY: THE SECOND EFFORT--Century ($3), called by able Colyumist Walter Lippmann, --The ablest effort of this kind that I know of."

/-Fivefold, the Grand Council's manifesto contained four additional points all somewhat vague and advanced in the name of "World Peace": 1) suppression of restrictions on international trade: 2) relief of the Danubian countries; 3) revision of "peace treaties responsible for the restiveness of peoples who may cause new wars"; 4) "renunciation of overfrequent conferences which arouse vain hopes."

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