Waldersee further reported the day before yesterday that he had presented his credentials to Favre, and was then received by Thiers. His reception by both gentlemen was exceedingly polite and amiable. A 6 per cent. voluntary loan of two milliards, with a 15 per cent. payment on account, was to be placed on the market on the 26th of June. With the money raised by this means, and with some other funds at the disposal of the Government, a payment of 375 million francs would be made. Thiers assured him that with the best will in the world he could not promise him the complete payment of the first half milliard before the 10th of July, as nobody could foresee at the present moment how the subscriptions would go. He, Waldersee, had, however, insisted upon the 1st of July, as otherwise we should be driven to question the good will of the French, and moreover--owing to certain financial arrangements--we required the money at that date. Thiers replied that he both desired and hoped to be able to begin the payment on the 1st, but it was a physical impossibility for him to collect the whole sum before the 10th. Waldersee had not stated that the proposal would be accepted in Berlin. The Chief thereupon telegraphed the same day that the proposal of M. Thiers was incompatible with the 7th Article of the Frankfurt Treaty of Peace, and could not, therefore, be accepted without counter-concessions. The telegram continues: “Besides, the understanding at first was that the occupation of Paris should be taken as the term for this payment, and it was only in consequence of a concession made by us out of complaisance that the expression ‘_rétablissement de l’autorité_’ was inserted in the French draft of the treaty. Furthermore, through an oversight, the payment of the following 125 millions was fixed in the French draft at sixty days after the payment of the 375 millions, instead of thirty days, or sixty days after the occupation of Paris, as M. Pouyer-Quertier himself had proposed. In the presence of the unconciliatory attitude which the French negotiators now manifest, we see no occasion to show them any favour without counter-concessions. If, therefore, the French Government does not make the payment provided for by the treaty on the 1st of July, we must regard it as a failure to fulfil its obligations under Article 7. I beg your Excellency to leave M. Favre in no doubt upon this point.”