The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, AUGUST 17, 1929. GERMAN REPARATIONS.

Hokitika Guardian, 17 August 1929, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, AUGUST 17, 1929. GERMAN REPARATIONS.

The July review of the Midland Bank, Lonuon, contains a somewhat exhaustive analysis of the much discussed Young plan for the settlement of German reparations. The artic.e brings out the manner in which the scheme decided upon by liie Puns Com.iut.ee

of Experts differs from the Dawes plan. The latter, unlike the new proposals, fixed no de.m.te period for the payment of annuities, anti another im-

portant difference is that under the ..'oung plan Germany will have to proide tlie foreign exchange for the purpose of meeting her obligations, whereis the Reparations Commission was responsible for tiie conversion of payments by 'Germany into the currencies of the creditor countries. The new scheme also abolishes the index of prosperity clause, under which Germany might have been caked upon 10 pay something more than the maximum of £125,000,000 that represented her obligation for this year. Under the Dawes plan, if it were found, impossible . to transfer the payments, provision was made for marks to accumulate in Germany in prescribed forms and up to prescribed amounts, and for further payments to be curtailed or even suspended if tlie limits were reached. The adoption of the new plan

would sweep away this arrangement.,A portion of the annuity, namely, approximately £33.0J0,C00, taking the exchange at par, is payable unconditional y througiiout the period, the balance ueing subject to a right of postponement of transfer for not more than two years. This raises the important question of Germany’s ability to pay, and the writer in the Midland Bank review considers that the Young Committee lias very little to say on this question, perhaps because it was inought that the Dawes Committee had exhausted the subject. It is well known that so far Germany has borrowed from foreign countries a sum equivalent to the whole of the amount paid in reparations. This is brought out by figures published by the Reichs Statistical Otfne. These show that, ipart from the year 192(5, the total import surplus of Germany, which had to be balanced by net borrowing from abroad, ranged from approximately £165,700,000 to £233.100,0 0. Wliat may be described as ilie unfavourable trade balance for 1978 was represented iy an excess of imports over exports; ncluding reparation deliveries in kind, of £63.600,(00, plus other current items, including cash reparations payments, amounting to £122,1 0,000 making a total of £185,700,000. In commenting upon these, figures, tlie Midland Bank writer says that the absence horn idle Young report of the extended commentary that might have oeen expected on this aspect of the subject suggests that the Committee confidently expect one of two things to happen; either a marked improvement in Germany’s trading position, which ,vill reduce her dependence on foreign resources, or, alternatively, an indefinite continuance of that dependence. Somewhat cynicully, the writer goes on to say that the Committee presumably have no fear of unwillingness on the part of the foreign, particularly American, investors to go on for a protraeted period sinking more and more of his resources in Germany. An essential part of the Young plan is that the schedule of payments provides for the covering or in.er-Allied debts throughout the who e period required lor their liquidation, as well as for substantial sums on account of reparations proper during tlie earlier part of the period, thus establishing in au-’ diority, as well as in fact, the closest possible relation between allied debts and reparations. If in the course oF time the liabilities on inter-allied debt account oi reparation creditors are reduced, it is provided that the greater portion of the relief shall automatically be passed on to Germany. In the opinion of the Midland Bank writer, this is clearly an extension of the basic principle of the Balfour Note., which has been written into various agreements, ratified and unratified, between this country and her European Allied debtors. This, it.in considered, places a heavy, perhaps not entirely welcome, and possibly somewhat unjustified responsibility on the United States. In regard to this, reference may ;be made to the following statement by Dr J[. G. Hibben, President or Princeton University, at the Independence Day dinner of the American Society of London last week:—“l hare said it publicly in the United States that I do believe we might have been a little more generous in the settlement of the war debts. After ad, it was a common cause. After we had declared war it was. a full year and one month before we could put an effective army on the front. During that time you of Great Britain and the A'lied armies were fighting orir battles for us, and holding the Hindenburg Line, not only with your money, but with the life blood of your sons.”