HOW GERMANY CAN PAY.

Taranaki Daily News, 26 February 1919, Page 6

HOW GERMANY CAN PAY.

(By W. R. Lawson, in the Daily Mail).

A business answer to the question, "What can Germany pay 1" will first tell us how the money would have to be paid —in other words, what financial machinery is available for such an apparently fabulous operation. A century and a half ago, when the only means of payment were metallic money, bills of exchange, and bank notes, thousands or even hundreds of millions were beyond human imagination. The financing of the Napoleonic war brought them a stage nearer to us. Then the evolution of nineteenth-century banking familiarised them to our higher Wanking circles. On the eve of the world war our credit operations had grown to such magnitude that the bank cheques cleared in London alone aggregated 16,436 millions sterling. The nine chief provincial clearings amounted to BS9 millions, making altogether 17,305 millions sterling.

Estimating for uncleared cheques, say 3000 millions, we get the enormous volume of over 20,000 millions sterling a of capital circulating day by day in the United Kingdom. The British Treasury alone has had a turnover of fully 5000 millions a year. The exact amount in 1916-17 was £5,026,484,702.

From these figures it will be seen that 8000 millions sterling of cash reparation by Germany is not so absurd as it appears at first sight. True, it would be a pretty big banking problem, but no bigger than, nor even as big as, some the 'City has had to grapple with during the war.

To begin with, it is not the capital sum that we are concerned with, but only the annual charge for interest. Let us be merciful and say 4 per cent.—the rate we shall ourselves probably have to pay when all our war loans are consolidated. This would mean an annual charge of !{2O millions sterling on the aggregate incomes of seventy million people; surely not an impossible or even a crushing burden for them, assuming that they pull themselves together and get all their wealth-creating machinery set going again as before the war. if they don't we shall lose our 8000 millions sterling, but have the equally valuable consolation of being able to live at peace for all time coming. On the contrary, if we are such ,'nincents as to be led astray by the pacifists and their "no indemnity" cry the Germans will have so much more industrial capital for competing with ua. To squeeze 320 millions a year out of Germany, directly or indirectly, need no longer be a formidable financial operation. The process would, of course, liav'c to be safeguarded by proper military guarantees. The principal wealth-produc-ing districts of the Empire would have to be occupied by Allied troops uiU'l the ndemnity was either paid off or modified. mull as fTie Cologne area is compared will what the Allies will be entitled to demand in the final terms of peace, it iue udes coalfields and factory .entres which could easily bear a levy of fifty millions sterling a year.

not take il when it is lying at our fett? The Germans will only laugh in sleeves if we don't. Extend the same argument to the whole of the German coalfields, the Baden 1 ne pht*pliate deposits, the factory towns of Sa.tcny. and a few luindred millions sterling a year will not be so very difficult for Germany to linanoe. She lias at home the ..ltvercst financiers in the world to help her—and here the faintest-heart-ed. politician*.