THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, DECEMBER 23, 1920. REPARATIONS CONFERENCE.

New Zealand Herald, Volume LVII, Issue 17661, 23 December 1920, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, DECEMBER 23, 1920. REPARATIONS CONFERENCE.

i The meeting of a conference of I Allied financial experts at Erussels | marks the real beginning of the j reparations settlement. It was I originally hoped to reach a definite | conclusion at Spa some months ago, i but other large issues of- a more urgent character intervened, and it was agreed that the details of the German reparation, particularly the assessment of the still undetermined capital sum, should be referred toanother conference, at which Germany should be represented. The interpretation of this decision gave rise in October to an exchange of notes between Britain and France. ■ Britain read it as meaning that, the body of experts who are to fix the amount of reparation and the method of payment should represent all the States interested, including Germany, and suggested that the gathering should be held in Geneva. France took the view that the members of the conference should not. be political appointees, but should be chosen from the existing Reparations Commission, which, under the Versailles Treaty, was given a very wide authority to determine all reparation questions. The French Government proposed that these experts should meet the German representatives and report back to another conference of the Powers interested. The principles at issue were whether the Reparations Commission should discharge the functions bestowed upon it by treaty or whether it should be superseded, and whether the details of reparation should be discussed before the German experts or should first be formulated into a programme for presentation to the late enemy. The procedure finally agreed upon was that experts nominated by the Reparations Commission should meet at Brussels to examine proposals to be submitted by Germany—this is now being done —and that the Allied Governments should then hold a conference at Geneva to consider the report of the Reparations Commission and to hear the German representatives in a capacity. The third stage will be reached when the results of the Geneva conference are communicated to the Reparations Commission as the basis of its determination. Finally, the findings of the Reparations Commission will go before the Supreme Council in order that any political questions arising out of them may be decided. Probably the Allied Prime Ministers would be the first to admit that the delay in determining Germany's liability has been an unfortunate thing for Europe. Uncertainty on this point to some extent tied the hands of the economic conference which met at Brussels recently, and it has probably reacted unfavourably on every country which is a party to the reparation clauses of the treaty, whether as debtor or creditor. Yet there have been extraordinary difficulties in reaching a decision, and even in assembling the data on which the decision must be based. The Allies must be just to themselves before they are generous to Germany, and it is necessary that they should be able to measure with at. least approximate accuracy Germany's ability to pay. As a matter of policy this has been consistently under-rated | by her Government and her experts, j and it can be said in excuse of the j delay that it has at least given the I Allies a chance of checking, the int formation furnished to them, and | forming independent conclusions as |to Germany's financial recovery. With an estimated national debt of £1,300,000,000, allowing for certain payments due to the Allies, and a deficit of nearly £250.000,000 in the 1920 Budget, Germany's capacity for meeting, further obligations is far below her moral and legal responsibility. It will be the duty of the Reparations Commission to examine ner resources very critically and to . oase their conclusions upon the I assumption that German industry [wdi not flag and that German taxa--1k.,.: ... . ... ■:■>-.:..:

tion will be maintained at a rate not inferior to that of any Allied country. ■ Yet when every allowance is made . for Germany's recuperative power, \ it is more and more apparent that the hoprf;s originally entertained in Allied financial circles are doomed r to disappointment. The liability foreshadowed in the Treaty of Verj sailles may be assumed to be not less than £10,000,000,000. It is believed that the Allies are now prepared . to accept £6,000,000,000 in full settlement, which is only £1,000,000,000 more than the amount actually offered by Germany before the signing of the treaty. How far this will go in meeting the Allied claims is a matter of conjecture, but it is obvious that the Allies, having already abandoned their claim to indemnities and war expenses, are now prepared to modify their demand for reparation, separation allowances, and pensions, and compound with Germany's exhaustion. This will involve a proportionate reduction of each, ally's bill, but, I fortunately, a basis for the division of the German reparation has been agreed upon, and Germany's default will not be allowed to strain friendships which have survived severer blows.