GERMAN LOAN

Northern Advocate, 16 June 1923, Page 5

GERMAN LOAN

QUESTIONABLE GUARANTEES.

CORRUPT CURRENCY. STABILITY AN ESSENTIAL. (Received 9.5 a.m.) (Copyright.) e LONDON, June 15. o Mr Lloyd George makes the follow--0 ing comment in his current weekly an <-.e of the aeries dealing with inter- - national affairs.— a j.i.? Germans have tried another - Note. Psychologically it is :t decided - advance on the first Note. It is crisp and condensed and does not indulge in - irritating processes of an argument, r You should never attempt to argue r with an angry man who is brandishing ■ .i bludgeon. The second Note avoids this provocation. It also suggests a number of substantial guarantees for payment of interest on loans to be raised for reparation purposes, but this array of securities standing alone will not entice the investor to risk money in a German reparation loan, lie will look at Germany as a whole, not in parts. The investor will want to know what is likely to happen to the country during the coming years, to its industry, finance, politics and people. A railway which collects its rates and fares in corrupt Currency is of no use as security for any loan. Customs revenue collected in fugitive coin is oqually worthless. The only j reliable, basis for a loan is a stable j Germany. You cannot have a stable Germany until you settle the repara- I tions. Hence the propositions that really matter in the German Note are those which bear a fixation of the amount Germany shall pay. "The Note suggests that further discussions should be by conference rather than an interchange of Notes. How can any unprejudiced person refuse to recognise the essential reasonablness of this? It is common ground. The annuities imposed on Germany in May, 1921, demand modifications. Even M. Poincare proceeds on that assumption. There is therefort; a most important and highly difficult figure to be ascertained. What annuity can Germany pay? Is it unreasonable that this question should be refererd to a tribunal that will give it calm, judical consideration? If j this were a business or trade dispute the proposal would be regarded as eminently sensible and fair, and the i 1 party rejecting it would be condemned ( by public opinion. "At the date of writing this article the French Government has not officially expressed its views on the German Note. One may safely assunje ; from past experience that Parisian journalists consulted the Quai d'Orsay before writing critical articles and criticism. They declare' that France will not discuss the German proposals until the latter withdraws passive resistance in the Ruhr. If this imports acquiescence by Germany in the occupation and exploitation of the Ruhr until the reparations are fully paid, then the position is hopeless. I can hardly helieve that the French Government means to insist upon this. In spite of a "Temps" article bearing that interpretation they may only ask that while terms are being discussed an armistice shall be concluded, the first condition of which shall be that ::!! obstacles in the way of supplying France, Belgium and Italy with reparation coal and coke shall be withdrawn. An armistice on such terms ought not to be difficult to arrange, especially if the Franco-Belgian au- ' thorities withdraw the ban on exports ' ( of Ruhr products to unoccupied Ger- 1 many. '' Unless the terms be mutually accommodating I surmise that the German Government will have insurniountable difficulty in persuading the stubborn miners and railwaymen to j assist in furnishing products denied to our fellow countrymen. It is < too j, readily taken for granted that the Ruhr workmen will obey Berlin decrees. The Wilhelmstrasse no longer commands the respect of pre-war days. Still the conference should experience no difficulty in fixing stipulations that c would make it possible for France to p enter a conference on reparations j, without suspicion attached to Minis- v ters who lowered the national flag.

"What are the objections to the fixation of annuities and guarantees for [Kiyment put forward in the German Note/ It is not a German method, but an American method adopted by the German Government —fl conference with an impartial tribunal. If the conference fails I know of no other way except resort to blind force. It is objected that, as the Reparations Commission has been provided for the purpose, to crcate another tribunal would be to supersede the Versailles Treaty. Tliere are two answers to this contention. The first is that the Commission as at present constituted is not a body to which Germany agreed to refer such questions. It is not the body that Britain aiid the other Allies contemplated. The withdrawal of America completely changed, its character. No man in his senses can pretend that the Commission in its mutilated form is cither impartial in composition or judicial in methods. "The American proposal is verv moderate. It. implies restoration of the .Treaty by reintroducing America to

the body that settled the If France objects to the appointment of >i Ijody, wftv should not theAllies agree that representatives on the Commission, with an American nominee luldod, v.ould be the tribunal? Whatever the French view in regard to <he suggested annuities, guarantees or ian impartial commission, it is inconceivable that they should reject a conference. It is the surest road to reparations. "It is too early yet to estimate the ! loss through the explosion of the Cannes Conference, but all idea of discussion since has been loftily antf petulantly dismissed It is an exhibition of pernicious wieakness. That which. has been substituted for it for twelve months has been a rather ridiculous display of feather rattling about, a.. farmyard to inspire terror, and threatening speeches full of ominous hints of " impending action. Every speech has cost France milliards in postponed reparations. French opinion naturally insisted on. action; hence this rash invasion at Cannes. "A two years' moratorium: would have been accepted as a settlements Already IS months of this period would have now • elapsed, .German, finances would have been under strict Allied supervision; the mark would have been stabilised and lonr.s negotiated winch would have substantially lightened the Allies' burdens. Germany is not in a position to pay now what she was able to offer then These 18 months have been devoted to siduouslv reducing Germany's capacity to pay her debts. At the titrte of th® Cannes Conference the mark stood at 770 to the pound sterling. It noir stands at *338,000. Germany wSll require an extended mpratorium to recover from the clumsy mishandling of the past 18 months. It Will take the debtor a long time to recover from bruises and loss of blood. What an achievement in scientific debt collecting! If the reparations are ever to be paid the Allies must retrace their steps, get back to the conference, policy, and so for everybody's sake stop strutting and get fcaefc to businew»'* —A. and N.Z*