The Hawera Star. THURSDAY, NOVEMBER 17, 1927. THE DAWES PLAN.

Hawera Star, Volume XLVII, 17 November 1927, Page 4

The Hawera Star.

THURSDAY, NOVEMBER 17, 1927. THE DAWES PLAN.

Delivered every evening by 5 o’clock in Hawera, Manaia, Normanby, Okaiawa. Eltham, Mangatoki, Kaponga, Alton, Hurleyville, Patea. Waverley, Mokoia, Whakamara, Ohangat, Meremere. Fraser Road and Ararata

It has been stated that Germany may be unable to meet her obligations under the Dawes Plan in 1928-9, wfien the annual payments will advance to 2,500,000,Q00 gold marks. The latest Teport of the Agent-General for Reparations, Mr S. P. Gilbert, shows that, up to the present, payments have been made without. difficulty, and that revenues should be available for the fourth, and possibly the fifth, year without imposing an undue burden on German industry and finance. The only development which, in his opinion, would imperil the successful working of the plan is the tendency of the Reich Government to increase its expenditure on armaments and in other directions. “The Times” describes it as “a policy of reckless extravagance.” The Government has decided to grant substantial increases in salary to members of tlie public service, and the result may be difficulty in meeting obligations under the Dawes Plan. Directly, the United States Government is the least concerned in the operations of the Plan, but indirectly it is a very interested party. It is recognised that any default on the l part of Germany, or a request j for a revision of the terms iinI posed, would reopen the whole quesJ tion of inter-Allied debts. More than one of the Allies attempted to make repayments to America dependent upon the receipt of reparations from Germany, and while the authorities at Washington insisted on what they termed ‘ ‘ capacity to pay ’ ’ as the only satisfactory basis, it is generally recognised that the capacity is governed by the payments which Germany is pledged to make to the debtor nations. The fact is stressed in some quarters that the Plan has not yet been actually tested, for Germany, in the first 'two years, was able to obtain foreign loans in excess of her annual payments, and one prominent critic has stated that “it is not under the Dawes system that the Reich has been living, but under a pseudo-Dawes system.” The Germans say that they may not be able to obtain foreign credits with the same ease in the future, and that the only possible alternative, is payment in kind. But high tariff barriers are the stumbling block there. If the large markets are closed to German goods, except under eonditions which make competition very difficult, then the capacity to pay must be reduced. This compelling fact is said to account for the vigorous attempts made by the Germans to regain lost markets, and also for her willingness to enter into any international agreement which might have the effect of lowering or removing tariff barriers. On the other hand, it is contended that the Plan, by definitely fixing the payments which the Reich must make, protected it against im- , possible demands and allowed it to adapt its policy to meet specific engagements. Any failure would create difficulties with regard to practically . all the funding arrangements entered into by the Allies, and make wholesale revision inevitable. The Plan is the basis of the post-war financial struc- i ture, and that, is why the steady discharge of the obligations it embodies is ' a matter of the first importance to the . Allied nations.