The Guardian And Evening Star, with Which is incorporated the West Coast Times. FRIDAY, FEBRUARY 25, 1927. GERMAN REPARATIONS PAYMENTS.

Hokitika Guardian, 25 February 1927, Page 2

The Guardian And Evening Star, with Which is incorporated the West Coast Times. FRIDAY, FEBRUARY 25, 1927. GERMAN REPARATIONS PAYMENTS.

.Judging from the report by the Ag.entGcnernl for Reparation Payment* relating to the second annuity period under the Dawes plan, Genuany, so far, has experienced no difficulty in meeting her obligations. Tlie first year provided no test, for of the tot),000,000

payable four-fifths were provided by a | loan raised in England and elsewhere. I For the second year's payment of £60,000,000 Germany had to depend upon her own resources, thus providing a test hoik of the country’s capacity to pay and the capacity of the creditors to receive payment without experiencing any untoward economic effects. The payment was effected quite smoothly, and it placed no undue strain upon Germany, while the cash transfers were effected without disturbing the exchange. It should he pointed out that the full standard annuity which will become payable in the otli. year is £125.000,000 or fully twice as much as that for the second year. Still, it is satisfactory that the £60.000,000 was met, especially when it is remembered that in 1925-1926 Germany suffered a serious business crisis incidental to the progress of reconstruction, the circumstances involving large disbursements for relief, though. con-

trary to some expectations, the annuity was provided without recourse to an international loan. August next will see the end of the third annuity year, for which period the amount payable is £1.000,000 less than in the past year; hut as Germany has volunteered to settle two supplementary Budget contributions by the payment of a lump sum of £15,000.000 this year, the total amount to he paid will not be £60.000.000 but £75.000.000. of which £20,500.000 will lie met out of the Budget. By paving under discount the additional contingent Budget contributions dependent upon the yield of the controlled revenues, the fourth annuity will he reduced from a maximum of £100.000.000 to £87.500,000 and the maximum for the fifth year from £137,500.000 to £125,000.000. Although the Budget continues to' balance, the Agent-General for Repara-

linn Payments indicated that internal borrowing may be necessary lbi - year

to cover Germany’s extraordinary expend it tires. The Budget lias had to provide unexpectedly large sums lor unemploymonl rclicl. while the (lO'ctninent lias embarked upon a programme of caudal outlays far exceeding anytbiug contemplated a year ago. ( "iiset|iienllv, unless greater moderation

in expenditure is shown. budgetary troubles may develop. As a result of iullntiou. on tin' grand scale. Germany virtually wined out. the old paper mark indebtedness, with tin* result that reparation obligations comprise (lie principal debts of the country. The national debt oilier lban reparations and the revalorir.ed paper mark debts amounted on September filth. last to CM2.000.090,' which, of course, is an exceedingly small figure for a country with so large a papulation. In this report. the A gent.-General draws attention to the strong flow of foreign funds into Germane, an effect of which lias

been to plat e the new German currency al ft premium compared wilb sterling and to enable Germany to draw a considerable amount ef g..ld from (treat Britain. Since the inauguration of the Dawes plan it is estimated that the amount of foreign moncv lent to Germany is Cl 7b.090.000. Evidently it is thought that this borrowing call be overdone, for increasingly strict instructions have been issued to cheek the movement.