GERMANY AND THE REPARATIONS.

Shannon News, 15 April 1924, Page 4

GERMANY AND THE REPARATIONS.

COMPLETE FINANCIAL Official: The Dawes Committee's re-, port with regard to the, measures necessary to . balance..the German Budget „ and. stabilise c the, currency, while recognising , that, .political con?. siderations, set certain limits within which' 5 the. solution paust be. found, if/ it is td have any chance,of acceptance emphasises that the, committee- has. been concerned with the problem of debt recovery, not the imposition* -of penalties. As business men they consider it hopeless to build up any con- ■ structive scheme except upon- the' basis of ! the "good, faith of all the parties carrying it out. On such a .basis the committee ’ concludes that there is no method of balancing the Ger-, man Budget, temporarily or permanently, under the present limitation of Germany’s fiscal and economic.rights over part of her area, it has, .therefore, compiled its report solely ,on the hypothesis that the fiscal , and economic unity, .of the Reich will .be restored. The experts emphasise that their forecasts Were. based on the assumption that economic activity will not be hampered ' by any form of control or organisation other- than that provided in the . scheme. All existing! measures hampering' such, activity! consequently should be withdrawn as soon as Germany has taken positive; steps towards a plan, such as establishing machinery, whereby, the assigned' revenue would .flow, through; Allied control. Such meas r ures should not be reimposed except in the case of flagrant failure ‘ when the creditor Governments should determine; the nature of the , sanctions.. The committee proposes the establish-, ment of a new issue bank in,Germany or the reorganisation of the Reichsbank as an essential .agency:; forcreating a stable currency. The Bank to have a monopoly of the right to’the note issue in Germany for half a century; the present 'paper money to be withdrawn and replaced' by a single; uniform currency, nainely, the ne\y bank’s bank notes; this currency to be kept stable in relation to ’gold, but not to bq convertible.' 'At the commencement, s fc would be protected by a reserve of 33 1.3 per centum and other liquid assets, the reserve to be held largely in the form of deposits in foreign banks. The bank is to be; the fiscal agent of the German Government, and to be allowed /to make short form loans to it, but the amount! and character of such loans is to be carefully' limited and safeguarded. The relations of the Reparations. Commission towards. the ; Bank are to be those of a private client The Bank is to have a,capital of four hundred million gold mai’ks, of which three hundred million will be subscribed jin Germany and abroad, the remainder to be issued in the purchase of the real property of the Reichsbank.

The German President and Board will administer the Bank, while ;a' general; board, composed of Germans and foreigners, one each being British/ French,; Italian; Belgian, American, Dutch and. Swiss/ will be-given broad' powers.; One of the members will; be a commissioner, who Will see that , the provisions of the law in regard to its issue of” notes and the maintenance of its reserve are observed. The schedule of payments, by Ger.. many recommended by the experts corresponds to the second alternative, exoept 2500 million gold marks are mentioned as payable in the fifth year and onwards, instead of 2460 million. • The liability of 1200 million gold marks in 1925-26 and 1926-27 will, be reduced or increased by a maximum' of 250 million, if the proceeds of controlled taxes—Customs, alcohol, beef, tobacco, and sugar, fall short of a milliard by one-third deficit, or exceed a milliard by one-third excess. "A corresponding provision is made for a reduction, or increase of a liability of 1750 million gold marks payable in 1927.28. The whole schedule, of payments will .begin co run only as from the date Germany regains full economic and fiscal sovereignity in her territory, !not only in regards .to repay-/ ataons, but all. Peace Treaty charges and interest and interest on any loan. - The railway company will be administered; by a board of eighteen members, half being nominated by trustees -appointed by the Reparations Com--missioh. The . managing director will; be a German, but a foreign Commis. ‘sion will be authorised to take measures if service bonds cannot be assured.

’ The Reich should provide five mil'liard gold marks debentures on.'; in-' '■'dustrial concerns, carrying interest at' J five per cent, to be administered by .'the Reparations Commission.

i;..As regards the deliveries in kind, the experts believe that during the first two years, deliveries. will be automatically! limited. Thereafter the programme will be considered by the -transfer committee, consisting of a representative of the Reparations Com mission and five foreign exchange experts from Britain, the United States, France, Italy,, and Belgium, who will apply the' bank balance deposited in tihe new issue' bank to the account Ipf 'the agent for Reparation payments to the-payments of deliveries in kind' o aiid'the purchase bf foreign currencies ‘.for as funds cannot be remitted/abroad /without. unduly prejudicing the foreign exchange market," they Will. be ..accumulated in Germany ,up ; to a, of five milliards of gold, ‘ marks.; When thati limit is reached,* the anhual ,payment of Germany in, in her!own corrency in respect to Peace Treaty charges, will be reduced to an amount which can be remitted abroad! yearly. Thus, it the annual, liability recommended by the experts proves, to exceed the surplus which Germahy is able to* create, the annual burden! will be automatically reduced/ to the; amount of such surplus: " An, //essential part of the scheme is that Germany, should issue in/the first year

a foreign loan of . eight:hundred million gold marks, in order to provide currenay stability ahd flnance deliveries in kind during ! the period of ecoh!i omic rehabilitation.