WELLINGTON NEWS

Hokitika Guardian, 30 November 1928, Page 3

WELLINGTON NEWS

It F PAH ATI OX AND U.S.A

[Special To Thu Cuaudian.]

M ELLINGTON, November 28

.Several cable messsages have been published in the press that the allies had agreed to appoint a unmmissioii of experts to examine and fix the amo ■ 11 1 of reparations. In the Versailles I reaty no amount was mentioned for the very good reason that the Allies could not estimate the losses they had sustained. It was no paid of the Dawes Committee to (ix the amount of reparation, that committee had merely to investigate CcrmanyV, capacity to pay and decide upon the amount to he paid by her annually. Germany began the lonrlh year of reparations a m'tilth or two ago. and must now pay annually C 120,000.000. Naturally Germain desires to have the total amount of reparation definitely fixed, 'for no nation can go on paying indefinitely.

It will he the duty of the'proposed commission of experts to fix the total amount: to he paid by Germany. Most, if not the whole of the annual payments of Cl 26,000.000 made by Germany must ultimately go to the United States. France, Belgium, and Italy are heavily indebted to the United States, as well as to Britain, and Fugland has to pay America, L'MO.OOO.OOO r year for the present, increasing I' CMS,not),fKH) ill two or three years. Britain will recover .from the allies plus German reparation practically tin whole amount that she has to pav the United States. America is the great credit nation and the ultimate re' ipienl of the whole of the German reparation and here is where the position become: complicated. The belief that Germany can pav he war, indemnities while the l mie States maintains a high tariff protectionist policy is fallacious. Germany can make payments only in goods or services, or both, tor she lias no spare monetary gold with which to discharge any portion of her debt. Because <’ the necessity of maintaining the international balance of trade the l nito< States must natur-Ov be con! i-mi 1 "' with Germany as the. üßimafe paver o' de !, ts owing from France and theotho war-jdeht countries, with German evoorts as the ultimate means ol payment. : * ■'

Since th(‘ acceptance of the Dave pilin'■ Germany has imported capita' mainly'from America, an a. scale nev«r known before in the world's economic history. But. the - sound mortgagin'’ ~f German property has its lim-ts. When once U’ev ore reached the perm- 1 ip which reparations could he paid U foreign loans will have e mo to an eiH and the world will he laced with fh I problem of reparation payments. Professor Gustav Cassell, the ear nent Swedish economist, in a lecture delivered recently at the University <> Chicago, on the subject of war debts pointed out that- " if the ci-dilor cn'"'try does not wish to receive the goods of the debtor country, the payments c debts must naturally meet with iusiipcrablo obstacles. Germany has in m< way hampered the transfer of goods t • the countries entitled to them. I h- \ Hies tlmmselves are |)tit:t'iig tin -, T eatest stumbling blocks in the wa; of transfers "by tlieir reluctance to ad mil German goods. If any on<me money and is ready to p - 'y me it i ratner singular behaviour on my nan if | impose certain duties on his deliveries, and in this one-sidmd way in crease the burden o: his liabilities. The least that cap be avked ol r-c-ipient countries is that they sba 1 not raise tlieir Customs duties a'-ci-fbe level at which they stood when th debts were contracted. Professor Cassol sees two essentia difaculties standing in the way '''' puvation payments: (1.) the stringen of the German capital market caused by the transfer of the payments from Germany to the recipient countries, and (2) the aversion of the recipient countries to the import of Go: man goods. This being so what is going to oe the ultimate result:- Hither one of two things must happen. Customs tariffs

must he reduced to allow of tiro transfer of goods more 'freely than is possible now, or, there must be a settlement of all war obligations on reasonable lines. The British foresaw this dillicuity and offered to write oil’ all war debts owing to her if the United Flutes would agree to write off the war debts owing by Britain. This was refused h.v America, and then Britain decided to obtain from her debtors only so much as would square her accouni with the United States, and wrote off the balance. It can he seen that a big problem is looming up, and the solut'on of the problem rests with the United States.