The Guardian (And Evening Star, with which is in corporated the West Coast Times.) TUESDAY, MAY 6th, 1924. GERMAN REPARATIONS.

Hokitika Guardian, 6 May 1924, Page 2

The Guardian (And Evening Star, with which is in corporated the West Coast Times.) TUESDAY, MAY 6th, 1924. GERMAN REPARATIONS.

Tin: i’owers are slowly coming to an agreement in regaid to this matter. The Dawes Commission has issued its proposals. Tsoy may he taken to represent an impartial view of what Germany can pay witliin a couple of years if her currency is stabilised, and her economic life thereby heroines normal. The proposal is tliat Germany shall pay the equivalent of .10.000.000 sovereigns tlie first year, 60.000,C0U sovereigns the second year, 87,000,000 the third year, 70,000.100 sovereigns in each of the fourth, fiftli and sixth years and thereafter. Also, after the sixth year, additional payments will he exacted, amounting, it is expected, to sev. oral hundred million gold marks a year. Twenty gold marks may he reckoned ns tko equivalent of a sovereign. The additional payments depend upon the degree of prosperity which Germany has attained in ‘the interval. More, they depend upon the good faith of Germany. The accounts which have so far reaerhed us, says a Sydney newspaper, do not state a definite amount as the payment to be made by Germany for reparation. From one point of view that would be considered a grave defect, since it might be argued that as long as the sum is left indefinite Germany, not knowing what burden will bo placed upon her, will have no incentive to work the burden off her back, but every incentive to evade it being placed on her back, even to the extent of dissolution. That is taking a very" extreme yiew. With Germany in her present condition, it is impossible to say to what exteat in succeeding years she may be able to replace the wanton destruction which she committed. When her commerce and production again become stable she will I "obably be able to fulfil the expecta-

tions of the Dawes Committee of Inquiry. The reparation was lixed early in 1921 at 132 miliards of gold marks, equal to 0,600,000,000 sovereigns, and payment thereof was to he made quarterly at the rate of 100,000,060 sovereigns per annum, also a sum equivalent to 2.3 par tent, of the value of her exports each 12 months, and a further sum equivalent to 1 per cent, of her exports. The yearly aggregate of these payments was to he taken as paying 5 per cent, uii the value of the reputation Ixmds outstanding and hearing interest, any surplus to be used as a sinking fund lor the extinction of the bonds, and so of the reparation claims. No further payment under this scheme was uiado after October, 1922, when bills for £2,000,C00 representing the balance of the instalment due to the previous 10th. of April, were paid. Thereafter Germany defaulted. The default led to the occupation of the Ruhr by Fiance. Payments now proposed, it will he seen, arc initially hv no means so heavy as those proposed in 1921. Furthermore, there is practically a moratorium of a year, as £10.090,000 of the first payment is to be made by means of an international loan, and the balance, £10,0110.000 is expected to he furnished by the State lailways. The whole of the 1920-20 payment is expected to lie provided from sources outside of Budget revenue, and it is not till 1920-27 that that revenue is to lie called upon to make any contribution. Short reference need he made to German balances abroad. The. McKenna committee. which worked in conjunction with the Dawes Committee, estimates that those balances amount to 390,000,000 sovereigns. Furthermore, that their origin was mostly sales of marks abroad. Tt is notorious that the greater part of what reparation payments Germany made up to Octol>ci. 1922. in cash were due to the sales of marks abroad also. Foreigners exchanged credit in the good currency of their own country for credit in German marks, and that credit is now worthless. Tho profit of between 300.090,000 sovereigns and 400.000.000 stated to have been made through those transactions is not exaggerated. The foreigner was mulct, by the German. What of the German balances abroad have Ireen accumulated by sales of exports have been obtained in exchange lor valuable consideration. How is Germany to make payments of these monthly instalments? Shares may be- sold in Gertuicn companies to foreigners, and thus credits may he < routed in London. New York, Amsterdam, and Paris, on which Germany could draw; hut the main nortion of the indemnity could he paid only by credits obtained in payment for exports. The countries to which reparations are due must take German gpvds. Fvon where the sales of shares of companies creates abroad' credit from which payment may lie made, payment will ultimately lie made in German exports, since payment of dividends on those shares will only he used in his own country by the foieignor, il his conntiy is willing to take German expoits, or goods from a country which will take German exports. As to the. ahiltiy of Germany to trade some idea, may he obtained from a" reading of her statistics. According to figures compiled by the League of Nations. German imports in 1923 were of the value of 301.020,000 sovereigns, and exports of the value of 303,900.000 sovereigns. When it is reniemliorod whal German authorities have related of conditions in their land, the figures are remarkable. As a matter of fact since May there has been an export surplus of considerable importance. The Dawes Commission has found that Germany can make large reparation payments. Will sulliiqelit pressure he exerted to compel her ?