GLEAN SLATE FOR GERMANY

Evening Star, Issue 20052, 18 December 1928, Page 14

GLEAN SLATE FOR GERMANY

THE NEXT TASK FOR WORLD STATE WARSHIP The Dawes I’lan, after all the trial balances of tho past years, entered nijoii tho period of maximum payments. Henceforth, indefinitely so far as any existing agreement is concerned, the Germans must pay £125,000,000 annually on account of reparations. The sum is more than a half larger than Just year’s contribution, and it is between three and four times as ranch as tho British pay ns annually on account of the war debt.—Mr Frank 11. Simouds, in tho ‘ American Review of Reviews.’ “Germans, and European exports generally,- are convinced that payments at this figure cannot go on for long,” says Mr Simonds, in the ‘ American Review of Reviews.’ Not because Germany cannot raise the necessary amount within her own frontiers and by taxation. This part of tho business is easy enough. Germany has no national debt, and hor reparations obligation, even at tho maximum figure, is far below what tho victorious British and French peoples have to raise every year to pay interest on foreign and domestic war debts. “ Until now Germany has been able to pay reparations because tho United States has been lending her huge sums each year and taking in return German bonds and shares. Wo turn over tho money, tho Germans _ pay it to tho Allies, and they turn it back to us on account of debts. Obviously such a process cannot go on indefinitely, because in tbo end wo should own Germany. “ One day Germany and her creditors will have to sit down and agree that all there is in the reparations account is a sum already determined by experts, say, lor purposes of discussion, £800,000,000. Then it will have to bo agreed that tbo Allies will accept this total, because that is all that they can get. “Tho next step follows logically. This total sum does nut exist in money. The only thing Germany can do is, so to speak, to pawn her liquid'resources, mortgage those of hor possessions which attract tbo foreign moneylender. In practice sbo will undertake to sell on tho world market bonds covering her railways, mines, and forests to the amount of £800,000,000, and transfer tbo sums raised to her creditors. They will divide tho money and give Germany a receipt in full. “ Then Germany will ho left with the obligation to meet tho interest and amortisation charges upon the bonds sho has issued. For all practical purposes she will be in tho position of a railway corporation which lias mado a bond issue. Out of out ot taxation, sbo will have to find the money to discharge her obligations to tbo investing public of tho world which has taken tho bonds. HOW THE ALLIES WILL FARE. “The £800,000,000 which may fairly bo accepted as pretty close to tho maximum obtainable represents no more than the total of either tbo British or French war debt to tbo United States. If that were all they were to get from Germany, then, since tbo French share would be but £400,000,000 and the British onlv £200,000,000, the two countries would still owe us £400,000,000 and £000,000,000 respectively. And Italy would be comparatively even worse off, because her share of tho German payments would be relatively insignificant. “ As a matter of fact the £800,000,000 is about all they will _ get from Germany. For the present it may bo possible to preserve tbo fiction that Germany can pay more, and uso the fiction as tho basis for tho final manoeuvre which must accompany the liquidation of tho money phases of the World War. “Now that tho investors in the United States have lent several billions of dollars to Germany, they have a stake in tbo German situation. They are directly interested in seeing Germany prosperous, and thus ahlo to pay them back ; and they aro indirectly interested in seeing reparations payments kept low, because these payments have a priority over those which must be made to them. “In tbo end the thing would come down to this: Would tbo United States agree to accept tho £800,000,00!) which Germany would bo able and_ willing, to pay as a full and complete discharge of our own claims against tho Allies of the war? Such a sum, while it would represent only about a third of the face value of our claims against Europe, would certainly amount in real money value to about fifty cents on tho dollar —perhaps a litte more, when one reckons tbo real money value of what France, Britain, Italy, and Belgium owe us. “ If we were willing to accept such a payment as a full discharge, then France, Britain, Italy, and Belgium would in turn release Germany and each other from all obligations. Evacuation of German territory would follow automatically, with only a brief debate over certain military safeguards necessary to satisfy French and Belgian demands for security.

“Then tbo German bonds would be sold in tho United States, the proceeds turned over to tbo United States Treasury. All that would remain would, be tbo normal process of paying off this bond issue, which the German Government and taxpayers would take care of.

“ Broadly speaking, that is what Europe is working around to. It expects to get to tho ipoiiit next year, because it does not believe that the German payments. under tho_ Dawes plan maximum can ho maintained for much more than twelve months. “ After our election, and perhaps before, but more probably after the British election, Washington is going to bo brought face to face with the proposals of a united Europe for an international conference, possibly to bo held in Washington itself, to wind up tho war.

“This conference may nominally be called to fix the total payments under tile Dawes plan; but it will actually bo designed to discuss the whole problem of debts and reparations as a single question. “ So far all European Governments and peoples bayo clung firmly to the conviction that no settlement could take place until wo shared in the conversations and the costs. This conviction has never been shaken, despite all tho superficially contradicting events of recent years. “At no time have the French, British, or Italian peoples believed that their debts to ns wore just debts, morally binding ones. They a''e considered as having no other just Station than a, signature extorted from thorn at a moment of extreme necessity. The one fixed idea, in the. minds of all Europeans has been that sooner or later we would see tho situation as they saw it. “This conviction easily explains why the Kellogg Pact proposal was hailed across the Atlantic as a significant sign of a, change of heart as well as of mind in the United States. Now Europe is getting ready to put everything to the test. London and Paris are getting Berlin in line for a joint application to be made in Washington when there is a new Administration.”