Ch. 1406Outmaneuvered
At the League of Nations conference, Britain, France, and Germany argued that Europe could not repay its debts, while the United States demanded payment and East Africa proposed easing repayment to contain the Labor Party. East Africa’s compromise angered the Americans and left the European debt dispute unresolved.
- The British representative asked the United States, East Africa, and Japan to recognize Europe’s inability to repay its debts and called for postponed deadlines and debt reductions.
- Commissioner Smith rejected Britain’s plea, and Gers backed him by insisting that European nations honor their contracts.
- The French and German representatives supported Britain, citing wartime devastation, economic hardship, and the threat that debt pressure would strengthen the Labor Party.
- Gers said East Africa would accept easier repayment terms but would not erase European debts, arguing that containing the Labor Party served world security.
- Smith angrily accused Gers of betraying the United States as East Africa’s deliberate compromise left America isolated in the debt dispute.