THE DAWES SCHEME.

Evening Star, Issue 20030, 22 November 1928, Page 6

THE DAWES SCHEME.

Dit S'iitKSKMAXx's statement on the matter of German reparations, which is likely to be the subject soon of another international expert conference, does not tnke us far towards a solution of the problem. The linn! reparations settlement, he declares, must be one that does not exceed Germany's capacity to pay from her own resources, and that will not endanger the standard of living of her people. Germany has been paying so far, but she has only been paying out of money which she has been borrowing from America. Tho Dawes scheme has now entered upon it* period of maximum payments. Tli© amount which Germany now has to find, indefinitely so far as any existing agreement is concerned, is 125 millions sterling a year, which is more than a half larger than her last year's contribution. It is generally agreed that payments at this figure cannot go on for long, but reduction of them without some further readjustment of international liabilities would make it impossible for the Allies to pay their debts to America. Mixed up vith tlio question is that of the Allies' occupation of the Ehinelaml, specially resented by Germany in her new position as a. member of the League of Nations. Mr Frank H. Sirnonds, the American publicist, has been considering the matter, and he points out that the present method of payment cannot go on indefinitely, because it would mean that the United States would eventually own Germany. One day, he is convinced, Germany and her creditors will have to sit down and agree that all there is in the reparations account is & suin already determined by experts, say, for purposes of discussion, 800 millions sterling. Then it will have to be agreed that the Allies will accept this total, because that is all that they can get. But .the share which Britain, .France, and Italy would each receive from such a sum would be only a fraction of what they would require to meet their debts to the United States. In the end Mr Simonds believes the position must come down to this; "Would the United States agree to accept the 800 millions sterling which Germany would be able and willing to pay as a full and complete discharge ol our own claims against the Allies of the war? Jf we were willing to accept such a payment a* a full discharge, then France, Britain, Italy, and Belgium would in turn relea&o Germany and each other from all obligations. Evacuation of German temtorj would follow automatically, with only a brief debate over certain military safeguards necessary to satisfy French and Belgian demands for security. Then the German bonds would be sold in the United States, tht, proceeds turned over to the United States Treasury. All that would remain would be the normal process of paying off this bond issue, which the German Government and taxpayers would take care of." Broadly speaking, Mr Simonds believes, that is what Europe is working round to. It expects to get to the point next year, because it does not believe that the Gorman payments under the Dawes Plan maximum can be maintained for much more than twelve months. The arrangement would not be welcome to the United States, but it may well be forced on her bv the necessities of the case.