THE LAUSANNE AGREEMENT

Northern Advocate, 31 October 1932, Page 4

THE LAUSANNE AGREEMENT

j Home papers to hand give de-* (tails of tlie agreement reached at jthe Lausanne Conference, which | was held just prior to the Ot- ! tawa Conference, and. as a consequence, was not given the publlieity which it would otherwise have obtained. The purpose of the Conference was to readjust and fix reparations payments by 'Germany. Ultimately the German delegations agreed to two bond issues aggregating 3.000000,000 reichsmarks (about £143,000.000), to hear interest at 5 per cent., and 1 per cent, amortisation charge, other terms and dates of the issue to he determined by the Bank of International Settlements at Basic 1 , which is to manage the public offering, hut subject to two conditions: One, that, no issue shall he made within three years, and that bonds shall not he sold at, a discount greater than 10 per cent. Germany is thus alloAvcd three years for recovery before interest begins to accrue, and the fact that the bonds shall realise at least 10 per cent, ensure that they will not be disposed of until the world’s markets make that price possible. The settlement cancels the two sets of annuities provided for in the Young Plan, aggregating 109,510.000.000 reichsmarks (approximately £5.500;000,000), payable over 59 years. These annuities are, of course, composed principally of interest. Their present value is estimated at less than £1,800.000.000. To arrive at the final'cost of the settlement, allowance must be made for interest on 3,000.000,000 reichsmarks of bonds to be issued, but on a present value basis the comparison is approximately £143,000,000 under the settlement to £1,800,000,000 under the Young Plan. This settlement, it must be remembered, does not release the German Government of its obligations under the Young Plan. This settlement, it must he remembered, does not release the German Govrnment of its obligations under the Dawes Plan loan, aggregating about £40,000,000. floated in Europe\ and the United States in 1924, and the proceeds of which were used to finance the reorganised Beichshank; nor the Young Plan loan of about £00,000,000. the proceeds of which were used for reparations payments; nor the German debt to America concerning the latter’s “occupation” costs; nor the settlement with Belgium for the redemption of German mark currency loft in that country. The crux of the agreement consists in the fact that it. is conditional upon subsequent negotiations with the United States for the sealing-down of the war debts owed by the Allied Powers. The European debtors, as has been pointed out before, felt that they could not justly bo expected to make sacrifices in regard to reparations to promote world prosperity, in which America would be a participant, unless America, assisted by relieving them of some of their burdens. It is this fact which makes so important the result of the American Presidential election, one of of the issues of which is the extent to which the United States should assist her debtors to assist their debtor—Germany.