NORTHERN ADVOCATE DALLY WEDNESDAY, JANUARY 23, 1929. REPARATIONS

Northern Advocate, 23 January 1929, Page 4

NORTHERN ADVOCATE D ALLY

WEDNESDAY, JANUARY 23, 1929. REPARATIONS

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The discussions in regard to reparations between the British and French Governments are closely associated with the question of the evacuation of Rhineland, Ever since the conclusion of the Treaty of Locarno Germany has been pressing the Allies to withdraw. Britain is willing, but cannot unless France does so, too. France has left the most advanced zone, but hitherto has not been prepared Jto go further. Her reluctance is due to the fact that the occupation is a guarantee for the fulfilment by Germany of her various obligations. France is within her rights, and she is entitled, should she agree to anticipate the dates for the progressive removal, to expect a quid pro quo. In any event it is essential that the reparation issue should be pur on a sound and settled basis. The Dawes plan, adopted in 1029, was to some extent tentative and experimental. The possibility, even the probability, of revision was foreseen when so many other schemes had been tried and found wanting. The question of reparations has presented endless difficulties. Originally Germany was required to make payments both in kind —such as shipping, livestock, and tim-ber-r-and in money. To the latter class the name of “reparations” was applied, because although “indemnity,” in the past the customary term,

has etymologically the same meaning, it lias come in popular usage to have a penal connotation, and “no indemnities” had been President Wilson's watchword. The Allies were 1 merely to receive compensation for the damage Germany bad wrought. The amount which Germany was to pay was at the outset unspecified. This arrangement not unnaturally excited criticism. Germany was condemned to a financial bondage to which no limit was appointed. She was to have a millstone tied to her neck for an indefinite period. Whatever sums she might pour into the lapis of the victors she would never know when she was to regain her freedom, and, therefore, would do her utmost to evade her liabilities. That was patent, but there was an-

other side to the case which the critics overlooked. The hard-headed men who framed the treaty were well aware that this dispensation would furnish Germany with a perpetual grievance. But there were other circumstances, of which account had to be taken. It was that the treaty should be drafted and signed with the minimum of delay, and in its financial clauses its authors were working in the dark. The principle that governed these was that Germany should make good the damage she had caused. But the devastation had been on such a vast scale that its monetary equivalent could not be reckoned at short notice. Moreover it was axiomatic that the payment demanded should not be beyond Germany’s capacity to pay. The economic fabric of Europe had been disrupted and its machinery, thrown out of gear. No one could'tell what Germany’s resources were, or whether or when she would recover. By not fixing any total the Allies secured a breathing space in which to watch developments and gather material for trustworthy estimates. By 1921 they were ready, and in January

of that year the Brussels Conference assessed the total at £6,600,000,000, redeemable partly by fixed annual payments and partly by a sum representing a percentage of German exports. This scheme proved unsatisfactory, and in 1924 the Dawes plan provided for payment by instalments which gradually increase until they reach the total of £125,000,000 a year. Germany has loyally carried out her bargain. The conversations that have taken place may have an important bearing on the financial relations of Britain and France vis-a-vis each other and the United States, By the AngloFrench agreement of 1926 Britain undertook, should her receipts from reparatious and Allied debts exceed her payments to America, to allow a corresponding reduction in the French payment. Not long ago Mr Mellon, Secretary of the American Treasury, alleged that Britain was making a.

profit out of her international financial transactions, as she received more from her foreign debtors than she paid America. That was shown to bo ridiculous. The agreement to which we have alluded prevents such a happy consummation from arising. At tdic best Britain can only hope to come out square. But altogether apart from this consideration Mr Mellon misrepresented the real position. After America came into the war Britain borrowed £850,000,000 from her, and lent her Allies £750,000,000; hence the American loan was made for the purpose of financing the Allies rather than Britain. At the end of the war Britain was owed £1,600,000,000 by her Allies, and owed America £850,000,000. Were the Allies able and willing to meet their interest bill, Britain’s receipts from this quarter would exceed her American payments. > But invariably the former have been but a fraction of the latter, and oven when reparations have boon added Britain has been a heavy loser. When reparations yield their full return, the ledger will just about balance. But this assumes that the arrangement adopted by the Dawes plan stands. Should the reparation payments be reduced, a contingency which is said to be quite likely, Britain will have to continue to make up out of her own pocket tlho difference between her receipts from foreign sources and her tribute to America.