Manawatu Daily Times Can Germany Pay ?

Manawatu Times, Volume LIV, Issue 6873, 1 April 1929, Page 6

Manawatu Daily Times Can Germany Pay ?

GERMANY'S ability or inability .to meet the reparations payments now being fixed by the experts committee in Paris has been the subject of a spirited controversy on both sides of the Rhine. It is interesting to note, therefore, that there are a few German experts, among them Geoig Beinhaid, editor of the Vossisclie Zeitung, who hold that the pessimistic attitude will not help in solving the reparation problem, quite apart from the fact that it threatens to undermine German credit if taken seriously. Germany’s reparation creditors, lie recently wrote, will conclude a sound debt agreement only with a sound Germany. The pessimism is based on the alleged inability of German economics to provide the necessary surplus to enable the payment of 2,500,000,000 marks annually from the country’s own resources. Undeniably there has been a decline in business in the past year, as compared with 1927. But this decline has only been partial, much slighter than expected and moreover the year 1927 was generously known as a “record year,” the conditions of which were never expected to last. In fact, German economic experts hold that industry lared considerably belter last year than had been expected, jn some instances the turnover even exceeded that of the “record year." Some would attribute this to the aid obtained from shorttermed borrowings abroad and thus are apt to describe this power of resistance as artificial. But many business reports seem to prove that in several instances at least it was also due to a sufficient amount of orders and thus based on sound business. The report of Allgemeine Eloktriziltats Gescllschaft (A.E.G.) one of Germany’s leading electrical' concerns, shows that both the turnover and the net profit of that company increased last year by 25 per cent, as compared with the record year 1927, this although in 1927 it had received an order to build a power plant costing 60,000,000 marks which was completed by the end of that year. At the end of 1923 orders on hand showed higher figures than in the previous year. German exportation increased last year by 1,500,000,000 marks as compared with 1927. This is not astonishing since 1927 brought a boom on the home market. But last year’s increase of exportation shows this improvement over former years; it was not achieved at the expense of prices. There was no dumping as in years past; prices remained favourable. When the commercial treaty with Poland, the negotiations for which have been dragging on for years now, will have been concluded, exportation will experience a further impulse. Smaller industries, especially the toy, music, glass and similar branches, complain, however, of too high importation tariffs abroad. Banking, too,, did well last year. In fact, the Reichsbank has difficulties in distributing its enormous revenues. The “Reich's Kredit Gescllschaft,” the first bank to issue its annual report, reports a increase of business. German financiers of late are busy again on international money markets. Germany is now about to grant Rumania a loan and contemplates participating in a loan to Turkey. Such financial transactions, too, will help in providing Germany with the necessary foreign bills to meet its reparation obligations.