REPARATION TOTAL.

Auckland Star, Volume LIII, Issue 309, 30 December 1922, Page 7

REPARATION TOTAL.

I BONAR LAW'S SUGGESTION. REDUCTION TO £2,500,000,000. ALLIES TO BE CONSULTED. : ißy '"aliie.—Press Association. — Copyright.) I Uleceived 11.30 a.ni.i LONDON. December 29. The "Daily Mail's" political correspon-de-nt states that Mr. Bonar Law is p.xI peeled to press at Paris for a reduction of the iota! reparations to be paid hv (iermany from £6,600.000.000 to £2.:>00,0()0,0ll(>. the figure suggested by the Bankers' Committee earlier in the year. The plan will be elastic, providing among other things for stringent control of Merman Customs. It will first be submitted to the Allied representatives. i I'nited Service.l ITALY'S ATTITUDE. OPPOSED TO FRENCH POLICY. ROJifK. December ill. Siguor Mussolini, at a meeting of the Ministerial Council, explained that the main reason why he will not attend the , Paris conference is the. continued Anglo-' French disagreement. Ele admitted that thii Reparation Commission was technically correct in its decision to declare Germany* default, but the consequence*, that France intended to draw from the decision, he said, were disproportionate, and were not contemplated when the Italian representative signed, the majority report. Signer Mussolini definitely committed himself against French occupation of the Huhr Valley. He would not consent to any policy of violence, he declared, even mi evidence of Germany's bad faith. Italy would collaborate with the Allies for pacific purposes only. He would not go to Paris to help to inaugurate a new war policy on whatever pretext. The Marchese Delia Torretta and the Marehese Holvagoraggi, who represent Italy in Paris, have been instructed to oppose any aggressive territorial schemes of France. -(A. and N.Z. Cable. | Whether the reparations total of £6.600,000,000 will be reduced by the Allies, as suggested by Mr. Bonar Law, I lo an amount which international finanI ciers regard as within Germany's capaj city to pay, ha« to be decided by the j Allied statesmen at a conference which ■ is to be held next month to discuss the question and the inter-related problem of the inter-Allied war debts. The finan- , cial recovery of Germany depends on I some reduction, for it is plain that the i licrmait Government and the German j jieople will make no real effort to pay reparations until the amount is subI stantially reduced. Rather than ati tempt to pay off a total of ffi.6u0.000.000. j the German people and the German j Government will evidently plunge their country into .the abyss of bankruptcy, and drag other -European countries I down with them. | Financial experts are agreed that it lis within the capacity of Germany to pay a considerable sum in reparations to the Allies, over a period of years, if she is given breathing time in order to put her finances in order. They con- ; sider that'she requires an interval of i two years to do so. and that during that period she should not be called upon to pay any instalments of reparations. France -and Belgium are urgently in need of money, and cannot wait two years for the reparation instalments due to them, but a moratorium for two years, such as Germany needs, could 'be arranged if the Allies reduced the reparations total to an amount which international financiers regard as within | Germany's capacity to pay. In that j event an international loan could be I raised for Germany, the money being j expended partly in putting Germany on I the path of financial recovery, and partly in paying France and Belgium substantial sums in the form of reparations. If satisfactory arrangements with regard to Germany's external debt in the form of reparations are made in this way it will then be necessary for financial experts to turn their attention to ! Germany s internal debt and her inflated | eurrenev. Germany's pre-war debt was 4,.i04.00b.000 marks, which, at the parity of exchange, was equal to I £'225.200.000. Her war expenditure, in- ! eluding the cost of demobilisation. j amounted to 156.000.000.000 marks (£9.300.000,000). most of which was met by loans. Since the armistice her internal debt has grown at a rapid rate. I owing to the ceaseless way in which she I has issued paper money to meet the I deficits in her budgets, and to purchase i foreign securities for the payment of ] the few reparation instalments paid in I cash. It is estimated that foreign I speculators have spent more than £200.000.000 in the purchase of German marks, in the expectation that they would soon recover, instead of sinking lower in the Rale of depreciation, and that it is really these foreign buyers of marks who have paid the £107.000,000 | which Germany has paid in cash inI stainients of reparations to the ReparaI tions Commission. ! Assuming that under a new arrangeI ment with regard to reparation, whereI hv tbe amount is substantially reduced, j iho payment of instalments extends ! over a period of 25 to .'lO years, the ', Allies would rink up with that arrangej mem a compulsory plan for the conver- | -ion of Germany's depreciated currency ' over ,i similar period. 'The dual proi hit-in of reparation payments and > ur . ren.-y cutiversioSFis exercising the minds .- of bankers and other financiers in i various countries, and especially in Al- • lied countries, for the Allies will have I the deciding vobv in determining the i -.-heme that Germany must adopt. An interesting -.-heme for the ,-onver--1 s:, ii of German currency on a graduated scale litis been put forward on the assumption thai the reparations hill «il; be reduced to £2.500.000,000. payl able in instalment- of £100.000.00(1 over'a period of -2"i years. It is sngge-ted th:• t Germany should hand to the Allies ea<di year an additional miiii of ; £.">.otm.oo(l. and I hut the Allies should i deposit (hi- sum iii the Bank of Kngland or the I'nited State- Federal lb- , serve Hank, and Use il as a i-uni-in-i i conversion fund. The Allies aoiild is«iw- . conversion fund notes to Germany t,' • enable her to call In and cancel a fixed 1 amount of her present note i-sue. at :i rate fit exchange declining ea h year. • ,oi an agreed scale. ft could ''-*• arranged under -hU scheme that -onver ■ 'tin a, par would be reached simultaneously with the pxtlnd'on o: 'he pro=eni note i-sstie .if Germans, and this enul.l also Wp made ; o -vn r hone ; with the final payment of reparations.