The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, MAY 11, 1929.

Hokitika Guardian, 11 May 1929, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. SATURDAY, MAY 11, 1929.

THE REPARATIONS PROBLEM The Reparations problem is again in the hands of a Committee of Exports, appointed by the Reparations Coinmission, the standing body which represents the creditor countries. There are two members for the United States serving by invitation, and one of these, Air Owen D. Young, who in his business capacity is Chairman of the General Electric Company, was appointed Chairman of the Experts’ Committee, and has figured lately in the cable news as supplying an acceptable compromise to Dr Schact. who in private life is President of the German Reichsbank. The new Committee is not appointed because the Dawes plan has broken down but because the experimental period of five years covered by it is approaching completion, the plan having become effective on September Ist. 1924. The plan was described in the Dawes report as providing a “settlement extending in its application for a sufficient time to restore confidence,” and as being so framed as to permit a final and comprehensive agreement “as soon as circumstances make this possible.” The plan ns adopted did not fix the mini-

menfcs should run or the sum total to he paid, both of which obviously should be determined in conference. Moreover, the lapse of time changes in conditions, aiid the experience of more than tour years in the operation of the plan ‘threw light upon nuriierous features of the situation upon which judgment could be given only tentatively five years ago. Germany wants the terms of her obligations, according to a published statement, definitely and finally fixed, and to be given freedom to work out the problem of making the payments in her own way. She wants to be relieved of the various supervisory committees and officials now located in Berlin; in short, to nave the debt reduced to a size which would require no extraordinary system of outside control to assure regular payments, and that, a'l such authority be terminated. She bolds that all payments shall he completed within the amortization period of the railway and industrial bonds created under the Dawes plan. She wants-freedom to obtain capital abroad as she may he able to do advantageously, unhampered by any restrictions imposed by her reparations creditors. The German spokesmen profess willingness to carry out the spirit of the Dawes settlement, emphasising the conditions stated therein that the task set- for her shall l>e economically practicable and that the standard of living of the German people shall not be reduced below that of neighbouring peoples. They urge that with a growing population in a restricted territory they mu&t be able to make capital accumulations in order to • improve their industries, maintain their competitive ability and provide for the growing needs of their people; also that although they have made the payments prescribed by the Dawes plan to the present time, they have done so by borrowing abroad to the full extent of the same, and that therefore the payments do not constitute proof of ability to' continue the payments over a long period of years. The Germans plant themselves upon the proposition laid down by the Dawes Committee, and which has liecn generally approved by economists, that reparations can be actually and finally paid only through a surplus of exports over imports, i.e., by the conveyance of tangible values, and that anv ether policy is only temporizing with the problem. They hold that foreign borrowing for the purpose of making the payments is only a shift of indebtedness, and should be excluded from consideration. On the side of the creditor countries, the interests of Belgium, Ttaly and Japan are relatively small, and the interest of Belgium has a conceded priority. The interests of France and Great Britain preponderate to such an extent that any important concessions must come from them. The French position lias been ro f, c»tlv slated bv the "Prime Minister, M. Poincare, as fo'lews: We have repented that, in order to accept the eonHusi n c of |l>e experts, we nmpsfc ask that tlmre he reserved to us. for as lone a time ns we must discharge our obligations lo America and England, sums large enough to cover our payments, and, in

addition, a net indemnity for our reparations.” In Great Britain a considerable body of opinion lias advocated a practical settlement on a basis that would pr./mote bus.ness activity, and the British members of the Jainmitiee may be expected to follow a conciliatory policy, if free to do so, but British industries are still depressed and feeling German* competition. In some quarters there is insistence upon no concessions on reparations and elsewhere suggestions that ertainly taxation upon German industry mast not be reduced below the burden carried by British industry. Jne i f the guiding principles of the jaw os C •iiimittec of which probably more will le heard was that taxuti :i: diould he at least a.s high in Gernany as in the countries to whom reparations are due. The British delerates alsi niay he inflirnccd by tiie delegates whose countries are indebted t .• .treat Britain and want reparations to help them pay their debts. In the surface of the situation it jfrpenrs that Germany has a hard task in hand to convince the ten committee members from the creditor countries that they should grant a reduction from the payments fix°d in tlm Dawes plan. Granting that they will want to affect a settlement which will be justified bv . results, and n"t bo a menace to the peace of Europe, they cannot be oblivious to public opinion in their own countries, which generally is impressed by the rapid recoverv which Germany has made in the.last J four years and the apparent ease with which the reparation payments have been accomplished. This description of the general situation will help the* reader to comprehend the unravelling of the problem ns it is inv being disclosed through the medium of tlie cable messages describing aspects of Die deliberations by the Committee of Experts which have the matter in hand.