The Dominion SATURDAY, NOVEMBER 26, 1921. COLLECTING FROM GERMANY

Dominion, Volume 15, Issue 54, 26 November 1921, Page 6

The Dominion SATURDAY, NOVEMBER 26, 1921. COLLECTING FROM GERMANY

Reporting on German.. reparations, a special committee of the Federation of British Industries has proposed some sweeping changes in the present scheme of payment, which provides broadly that Germany is to pay with exports for international credits to be transferred at stated intervals to her creditors. One section of the committee’s proposals, which as a whole are very far-reaching, was interestingly elaborated by Sir Peter Rylands (president of the Federation of British Industries). Admitting, we are told, that under the methods now in force Germany could only pay reparations by means of exports competing with British industries, he suggested “that Britain ought to control the classes of goods acceptable, and, in conjunction with her Allies, force Germany to build railways, docks, and harbour works in undeveloped countries under Allied control; also to build super-power electric stations for Britain at her own expense.” In theory,, at least, these suggestions bold promising possibilities which are not least obvious where the payment of reparation due to the different countries of the Empire is concerned. • It , is now widely agreed that the existing reparations scheme is in some respects unworkable, and is calculated to inflict serious damage on the trade and industry of the countries to whom reparation is due. : France, with an enormous area of devastated territory to restore, is in an exceptional position, and it seems likely that her economic and financial problems will be appreciably lightened by the deliveries of German merchandise she is to receive, under the Wiesbaden agreement, for purposes of reconstruction, in the devastated areas. In the extent, however, to which the payment of reparations depends upon the development of Germany’s general export trade, serious. complications have already arisen. At best, Germany can liquidate only a comparatively small part of her liability to Allied countries by exports of raw materials, and amongst these raw materials the coal apportioned to France bulks large. There is no escape from the conclusion that if Germany is to redeem her reparation obligations she must pay in great part by means of exports of manufactured goods. From the point of view of Britain and other manufacturing countries it makes little difference whether German exports of manufactured goods to be set against reparation payments arc sold in their ‘own markets- or in those of foreign countries with which they trade. The pith of the matter is that under the existing scheme' Germany’s ability to pa,v reparations is, measured to a great extent by her ability, to beat her creditors in commercial competition in the markets of the world.

If there is any way of modifying this state of affairs with advantage to the British Empire and other creditors of Germany it is presumably to be found in some such ebn.trol of German exports . as Sir. Peter Rylands and the special committee of the Federation of British Industries have advocated. The theoretical advantages of the pro-, posed scheme, of control are-unques-tionable. The Empire contains vast areas of unoccupied land and other undeveloped resources; and, apart from the degree of unemployment that exists at present in most other countries of the Empire, there, is-at present in the United. Kingdom a great army of workless people whoso support is in-one wily and another a charge, on national revenue. Much might be done., to remedy these conditions by obtaining from Germany such manufactures as would represent the capital needed to open up, idle lands in different parts of the Empire for settlement and productive occupation. In this matter the vast extent of its undeveloped resources makes the position of the Empire in some respects.analogous to that of-France, with its devastated territory. Under ideal conditions, the-, manufactures ' thus obtained from Germany would represent A clear addition to anything the Empire is able to provide' out of its own resources. Including 'such things as railway material and rolling ’ stock, hydro-electric, plant, and some other kinds of machinery. -and fencing wire and other materials needed in laying out farms, they obviously might, .constitute a great part of the working capital required to bring big areas of land now idle and unoccupied into productive occupation. Theoretically, at least, it would be possible in these conditions to obtain a large amount of capital for new development without interfering with the demand for the current output of British manufacturing industry. On the contrary, as the, scheme unfolded scope for the development of inter-imperial trade Would progressively broaden. It is a question, however, how far these theoretical possibilities could be approached in working practice. The completely successful operation of the suggested control of German exports would demand in the first place a degree of co-operation by the Government of Germany and by financial and industrial authorities in that country which they are not, hr any means inclined to offer. Then again, although on paper tlw" is a clear opening for the utilisation within the Empire of dcvolonmontal capital the Empire is unable to provide out of its own resources, the actual introduction of this capital in conditions safe-

guarding British industry would involve certainly a difficult and complex adjustment, and might involve heavy administrative charges. Although such obstacles and difficulties cannot be ignored, the proposals of the Federation of British Industries hold possibilities which ought to receive thte practical attention not only of the British Government, but of the Governments ofthis and other Dominions. In this country it would be an indefensible policy to obtain from Germany material fur development, that might be obtained in the ordinary way fivm Britain, but it would be another matter altogether to obtain from Germany by way of reparation material that otherwise would have to be done without. As a Dominion,- we have an interest, also, in the possibility that Britain may find in oversea investment a useful means of collecting reparation from Germany without detriment to her own industries.