Manawatu Daily Times Germany’s Capacity to Pay

Manawatu Times, Issue 6848, 1 March 1929, Page 6

Manawatu Daily Times Germany’s Capacity to Pay

jpUE outcome of the deliberations of the International Committee of Experts now sitting in Paris to consider Germany’s ability lo pay in full the reparations fixed under the Dawes Plan will be awaitel with keen interest Almost ever since this settlement was arrived at Germany has protested her inability to meet the demands which she declares are strangling the industrial life of the nation-

RecenUy Mr. Parker Gilbert, the Agent-General for Reparations, reported that the various revenues on which, in accordance with the Lawes Plan, the German Government has to rely for the means to pay its annuities, arc so fruitful that they produce enough to cover tho instalments twice over. In the case of the industrial levy he states that the return was so good that the Government was able to reduce the assessments. Comparatively small icsoit was made by private parties to foreign loans and in the last four years Germany appeared to have secured nearly all the foreign financial aid her various necessities require. The standard annuities under the Dawes scheme of £125,000,000 per annum leave a considerable margin after the total annual payments on account of Allied deots to the United States and irreducible charges have, been subtracted. The total of these payments rises from about £50,000,000 in 1930 to about {70,000,000 in 1940, and reaches rather more than £50,000,000 during the years 1980-87.

The Scotsman in a well-considered article recently emphasised That it would probably be wise not to arrive at too optimistic a conclusion from the report of the Agent-General and commented. •• The economist will look for the export surplus that is to pay for reparations, and he will not find it, because though German cxpoits have increased, the volume of imports increased also, and the loieign trade deficit show's a tendency to grow. What prospect is there of German exports continuing to grow ? Costs and prices have shown a persistent tendency to rise, which diminishes the power of German industry id compete with foreign-producers- a fact which is not displeasing to manufacturers in this country, though it militates against the payment of reparations. Germany’s prosperity has been built since the war largely upon a basis of foreign loans, but ii is a question whether Germany is not maintaining a false standard of living on the strength of foreign borrowing.

“The ..ost of living has shown a general tendency to rise, aud there has been an upward movement in home consumption so that »he prospect of an export surplus seems remote. These considerations suggest that the payment of the Dawes annuities may not be so simple cs French opinion is prepared to believe. Excess'.''C demands on Germany would mean the bankruptcy of German industry, and a final settlement of the reparations problem will require to take ao.’junt of this danger as well as to ensure that Germany shall make adequate reparation.”

France asks that the country which has been adjudged guilty of precipitating the war and which practically escaped the devastation she herself so ruthlessly suffered shall pay, in addition to the amount required to meet her war debt, a reasonable contribution ;o the cost of reconstructing her devastated regions and in this demand she is seeking no more than bare justice. If any modification in terms is made a corresponding reduction in the Allied war debt to America must be conceded and it may be therefore safely assumed that Germany will require to establish a convincing case before any relief fromlhe burden is granted.