REPARATIONS AND WAR DEBTS.

Otago Daily Times, Issue 21539, 11 January 1932, Page 6

REPARATIONS AND WAR DEBTS.

The German Chancellor, Dr Bruening, has informed the British Ambassador at Berlin that Germany is unable to continue to pay reparations, and that her delegates to the Lausanne Conference must press for the total abolition of them. In the light of the report furnished by the Basle Committee it is to be recognised that the familiar argument that Germany could pay if she had the will to do so amounts to little more than begging the question. Dr Bruening’s statement is likely to be received _ with disfavour in France, but probably it represents the situation fairly enough. The impending conference at Lausanne will be called upon to approach the reparations question from a different and more important point of view than that with which any similar conclave has had primarily to concern itself. A good deal seems to depend upon the possibility of an understanding between the British and French Governments in respect of their attitude towards Germany and her obligations under the Young Plan and the Versailles Treaty. It was reported a few days, ago that the prospects for an AngloFrench agreement on the subject were good, though the indications have been that each Government has favoured a compromise in the shape of a moratorium, the difference in their views relating to the period that would be expedient. The Basle Committee concluded that Germany’s problem, which it described as largely the cause of the world’s increasing financial paralysis,, necessitated common action by the Governments on the basis that it constituted a world problem. “ The crisis,” the Committee affirmed, “has now assumed tremendous dimensions, and if it is not counteracted a further catastrophe is. likely. The only permanent hope of restoring confidence is adaptation of reparations and war debts to meet the needs of the world upheaval.” It has been left to the Governments concerned, however, to decide what shall be done. The fact that the United States has declined to be represented at the Lausanne Conference seems to be distinctly unfortunate. It is clear that Germany will not be satisfied with any proposal for a compromise as regards reparations, and it seems very uncertain whether compromise in the direction which has been indicated will be productive of any permanent good. After all is said it lies within the power of the United States to do more than any other nation, or combination of other nations, to bring about the readjustment for which the world is looking. The question of the cancellation of war debts and reparations alike is assuming increasing prominence. Any movement in that direction must be influenced very largely by the decisions of the United States. If war debts were cancelled the majority of the Powers concerned would probably be willing enough to see German reparations go by the board, though France would expect to have the deciding voice in that matter. A New, York banking view is that it rests with France to achieve a complete settlement of the reparations problem. But, seeing that the war debts question affects the outlook on reparations— Great Britain, for example, has stipulated for reparations only in proportion to her own debts to America —it is difficult to escape the conclusion that the onus rests upon the United States of saying whether there shall, or shall not, be a satisfactory adjustment of the reparations question. As the Basle Conference pointed out, the two issues—war debts and reparations—cannot be separated.