THE DAWES PLAN.

Putaruru Press, Volume IV, Issue 122, 4 March 1926, Page 3

THE DAWES PLAN.

FIRST YEAR’S RESULTS. Success So Far Undisputed. Great interest has been attached throughout the world to the working o± the Dawes Plan, which ended its first year of operation on September 1 last. Though success so far is undisputed, it is conceded by economists generally j so short a period. The first annual report of the Reparation Committee shows that thestipulated 3,000,000,000 gold marks (approximately £48,.800,000) was duly paid, of that amount 800,000,000 gold marks represented the proceeds of the international loan made to Germany when the scheme was introduced. The remaining 200,000,000 gold marks were paid by the German Railway Company as interest in 31,000,000,000 gold marks in bonds, which it had given under the reparation plan. . This company, capitalized at 26,000.,000,000 gold marks, embraces all the former State railways. Plans have been made for increasing the earning power of the company. It is pointed out that it would be a mistake to consider the Dawes Plan solely in the light of payments made during the past year. The sheme has made possible a stabilisation of Ferman currency, and has done much to restore order in German industry. During the year, moreover, several plans were put into effect, although they have not as yet had time to bring direct financial returns. Industrial Debenture System. The industrial debenture system, organised during the first year, but which only goes into effect during the second, will be a special reparation contribution made by German industry. The 5,000,000,000 marks represented by these bonds will come from 60,500 industrial concerns, a levy amounting to 15.73 per cent, of their business capital having been fixed. From this sources it is expected that 125,000,000 marks will be collected in the second year, and in the fourth year the normal amount of 300,000,000 marks. Another accomplishment of the Dawes Plan during the past year has been the control of German revenue—though this has, as yet, brought in no actual reparation payment. It is planned that the mark budget payment of the normal Dawes Plan year shall be guaranteed by tho control of the revenues from Customs and taxes on sugar, spirits, tobacco, and beer. This system of revenue control actually began on October 3, 1924, the revenues being paid weekly to the commissioner, who immediately releases them tfo the German Government. In the second year, however, should Germany fail to produce the budget payment, these revenues will be kept. Deliveries in Kind. On the difficult problem of deliveries in kind, a set of regulations has be on drawn up. They came into operation on May J last, when a new method of deliveries in kind superseded the 1921 British agreement. Now, 200 German exporting firms pay each month to the Reichsbank thirty per cent, of the proceeds from their English business. Most of the other creditors, including France, have, during the first year, taken their receipts in coal, chemicals, etc.

In 1928 the German annual payments rise to 2,500,000,000 raa.ks. The question has been asked whether the creditor nations will be able to absorb commodities to that extent without serious effect upon their domestic in dustries. It is evident, however, that, if reparation payments are wanted, they must be taken in the form of goods.