The Evening Star SATURDAY, DECEMBER 6, 1924. ANGLO-GERMAN TREATY.

Evening Star, Issue 18809, 6 December 1924, Page 6

The Evening Star SATURDAY, DECEMBER 6, 1924. ANGLO-GERMAN TREATY.

Wuex tlio Dawes Scheme was adopted the British investor was invited to subscribe to the German loan. This he did to the full extent of'the amount allocated in the apportionment among the Allied countries. From the first this loan was regarded as the logical acceptance of the Dawes Report, and it was for the most part recognised that sentiment must he set aside and the putting forth of effort to make the loan a success must bo considered as a duty. Without, thd* loan the only promising plan for restarting international financial machinery to aid the financial recuperation not alone of Germany, but of the greater part of Europe, would bo equivalent to a boiler to which fuel is denied. British money having been advanced "to got German trade going as before, it would have been quixotic had Britain stood aside and made no effort to participate in that trade. Other Allied countries, notably France, were earlier in the field, and it is no secret that the United States has been quietly and systematically establishing business connections with Germany, and to some extent finding there ■ a field for the investment of capital. As far hack as August the sudden change in France’s attitude towards her Continental neighbor caused great anxiety in Britain. The motive of the new movement appeared to he the replacement of the boycott by a partnership. Under the proposed Franco-German Commercial Treaty the products of Alsace-Lorraine, which, according to the terms of the Versailles Treaty, have duty-free entry into Germany until January 10, 1925, were to continue to receive such preference thereafter. With France still retaining her control of the Ruhr, the merging of the Lorraine ore interests and the coke-producing interests of the Ruhr, complementary to one another in the manufacture of steel, threatened a combine which would not only dominate

the stool industry of the world, hut was regarded as a menace to the very existence of one of Britain’s key industries. It was at once perceived that equivalent concessions would need to be obtained by the other Allies inanticipation of the expiry on January 10, 1925, of Germany’s obligation to accord “ most-t'avored-nation ” treatment to the goods of the Allied States.

In Britain there have been two distinct schools of thought regarding the trade attitude to Germany. Prior to the adoption of the Dawes Scheme there were persistent reports of terrible depression in practically all Germany’s manufacturing districts. Some .observers in Britain advocated no interference to lessen or prevent the alleged impending calamity. They declared that the complete collapse of Germany and the consequent removal of all dread of her economic and military recovery would for the world iu general ho the host thing that could happen. There would then ho no dumping and no devastating competition such as may have to be—as will evidently surely be encountered while Germany is struggling to her feet again, with the likelihood of continuance with cumulative force after her recovery. On the other hand, a different school of thoughti urged that world trade had been more or loss in a state of chronic depression since the armistice, and that a settlement on tlie lines of tiio Dawes plan would lead to a general revival, and that in helping Germany out of her dilticnltics Britain would at the same time be extricating herself from her own persistent troubles. The possibility of a. combine, unmistakably directed against herself, between two nations, both defaulting debtors to her, but one an ex-enemy and the other an ex-ally, had to he faced. If the former of the two schools of thought referred to above had prevailed, Britain’s isolation, both political and economic, would have boon full of unpleasant if not dangerous elements. So Britain has made terms with Germany independently through a commercial treaty, as well as jointly with the Allies through the Dawes Scheme and its attendant loan. Not to have followed up that step as she has now done would have been to handicap herself voluntarily, besides playing into Branco’s hands. It will be noted that ’onvcrsations on tho matter arc passing 'between Mr Austen Chamberlain and M. Harriot, tho general nature of which may ho easily guessed. ft 3s doubtful whether, had France and Belgium icu'rainod from negotiating with Germany for commercial treaties, Britain would have followed suit. In pre-war times the direct trade between Britain and Germany was of a onesided character. ~ Broadly speaking, Germany purchased from Britain raw materials and semi-manufactured goods, while sho sold Britain finished goods at competitive prices. Altogether Germany sent to Britain goods to a value more than 30 per cent, greater than the goods she took from Britain. A comparison between present-day hours of work and rates of wages in Britain and Germany suggests that the difference in trade adverse to Britain is likely to be increased rather than decreased when the new treaty comes into force. Though iu pre-war times Germany was commonly referred to as Britain’s second best customer, the phrase is misleading if no account is taken of the relative amount of labor put into tho goods exchanged. For that reason no favorable reaction of the treaty on Britain’s unemployment problem can be deduced, since both parties to it agree to abstain from using their tariffs as a moans of discrimination. Fortunately, the treaty, embodying this important provision, does not apply to any part of the Empire outside Britain. The dominions are at liberty to discriminate by means of their Customs tariffs as between British and German goods. Should British manufacturers be in danger of losing any part of their homo market to Germany, there will ho all the more need to conserve to them tho oversea markets they have in the dominions, an attempted Gorman invasion of which may certainly bo expected as Germany gradually feels her feet again.