THE SETTLEMENT OF INTERALLIED DEBTS
The reply of the London Cabinet to Mr. Clementel's letter was delivered yesterday to Mr. Herriot
IT IS TO BE PUBLISHED TODAY

Great Britain expects from the Allies and Germany only the means to free herself from her own debt to America

The news which reached London on Friday evening led to the prediction that the British reply to Mr. Clementel's note on the question of interallied debts would not be sent to Paris until the middle of next week. Contrary to this information, the British note was delivered yesterday to the Quai d'Orsay, Messrs. Baldwin, Austen Chamberlain and Churchill having abruptly abandoned their plan to send to Paris the long memorandum which they were preparing with their experts and having decided to address to the French Government only a short letter defining the general principles according to which they propose to settle the problem of debts.

As Mr. Herriot was preparing yesterday morning to leave for the countryside where he intended to take two days' rest to recover from the fatigue caused by the last sessions of the Chamber, the British Embassy informed him that it was in possession of the expected document and that the Marquis of Crewe was requesting an audience.
The President of the Council having delayed his departure, received at 4 p.m. the British Ambassador, who gave him the British reply and with whom he spoke for a few minutes.
The President of the Council, after having taken note of the British reply, gave it to Mr. Clémentel and then left by car with Mr. Israël.
As will be seen from the dispatch of our London correspondent, the British note, which is very short, maintains the principles formulated in 1922 and 1923 in the Balfour and Curzon notes, according to which Great Britain claims from its allied debtors and from Germany only the sums which it is itself obliged to pay to the United States, by virtue of the Mellon-Baldwin agreement.
According to our London correspondent, the British government would go even further and propose a system which would prevent France and Italy from having to answer in place of Germany in the event that the latter did not fulfil all its commitments.
If this news is confirmed, an important step will have been taken towards the settlement of the problem of inter-allied debts.
In accordance with a decision taken by common accord by the French and British governments, the English reply to Mr. Clémentel's note will be published simultaneously in London and Paris today.

THE BRITISH NOTE

London, February 7 (d. P. Parisien.) In its sessions on Tuesday and Wednesday, the British Cabinet discussed at length two documents prepared by the Treasury and which were to constitute the English reply to Mr. Clementel's note.
These documents included a short letter defining the general principles to which, according to the London Cabinet, any plan for the consolidation of the French debt must conform and a memorandum entering into the details of the problem of debts and containing insights likely to enlighten the French Government in the elaboration of a plan.
Yesterday evening, suddenly, Messrs. Baldwin, Chamberlain and Churchill, after having taken the advice of the other members of the Government, decided that only the letter would be sent to Paris and that the memorandum would be retained for the purpose of a more prolonged examination.

This letter, the text of which will not be published until tomorrow evening, is a document of about three hundred words, barely a page long, and confines itself to recalling, without figures or technical details, that, in accordance with the Balfour and Curzon notes, Great Britain expects from the Allies and Germany only the means of freeing itself from its own debt to America. As the Italian debt must be taken into account, it follows from the Balfour note that the payments of France and Italy would be in inverse ratio to the German payments.

I understand that, in its statement of principles, the English Government suggests a general method by which France and Italy would not be exposed to covering the deficit of German payments themselves under the Dawes Plan.

In the last paragraph of his letter to Mr. Clementel, Mr. Churchill invites his French colleague, in the most cordial manner, to make suggestions to him and assures him that, whatever methods of payment and the time limits envisaged, they will be received with the greatest favour. In authorized circles, where the news given by the Petit Parisien of a possible and imminent visit by Messrs. Herriot and Clémentel is not denied, there is an obvious preference for the system of direct and verbal negotiations, whether it concerns debts or security.