REPARATION PROBLEMS

Otago Daily Times, Issue 21539, 11 January 1932, Page 7

REPARATION PROBLEMS

GERMANY UNABLE TO PAY ON VERGE OF COLLAPSE BRITAIN INFORMED (United Press Association.) (By Electrlo Telegraph—Copyright.) BERLIN, January 10. (Received Jan. 10, at 5.5 p.m.) Dr Bruening informed Sir Horace Rumbold (British Ambassador) that Germany is unable to pay her reparations, and her delegates to Lausanne must press for their total abolition. Authoritative circles point out that Germany’s economic life is now on the verge of collapse, which certainly cannot be avoided if an attempt is made to impose a reparation burden. If Germany is relieved of this burden she will be able to pay her private debts in due course, but she cannot possibly pay these and reparations.

THE LAUSANNE CONFERENCE. POSTPONED FOR ONE WEEK. BERLIN, January 9. (Received Jan. 11, at 1 a.m.) A later official statement says Dr Bruening has agreed to the Lausanne Conference being postponed to January 25. He said that any attempt to maintain reparations must lead to disaster not only for Germany, but for the whole world. It was imperative to find courage not to allow economic problems to be subjected to political considerations. Referring, to the Basle report, he declared that this not only proved Germany’s inability to pay, but how clearly reparations were connected with the general situation and how thoroughly conditions had changed since the Young Plan was introduced. Moreover, it showed that Germany had taken measures unparalleled in modern history. - OPINION IN FRANCE. THE CONFERENCE TORPEDOED. LONDON, January 10. (Received Jan. 11, at 1 a.m.) The week opens with dramatic developments in the European situation, chief of which are Dr Bruening’s declaration concerning Germany’s Lausanne demand for cancellation of her reparation debts, and M. Laval’s embarrassments owing to the death of M. Maginot, and the illness of M. Briand, necessitating reconstruction of the Cabinet. These developments have led the British Government to propose that the Lausanne Conference should open on January 25 instead of January 18. France and Germany have intimated their assent to the proposal. France’s immediate reaction. to Dr Bruening’s statement was, naturally hostile, and already there is a suggestion that the situation calls the National Government to face an attempt to tear up the Versailles Treaty. Dr Bruening’s statement caused a sensation in France and produced allegations that Dr Bruening has torpedoed the Lausanne Conference.

A BANKER’S PLAIN SPEAKING. REPUDIATION OR CHAOS. LONDON, January 10. (Received Jan. 10, at 8 p.m.) Externally the replica of the Strathnavar, the sister ship Strathaird, has just completed fitting out at the dry dock at Liverpool. She will undergo speed trials on the'Clyde. Internally she is just as much a dream ship as the Strathnavar, the gorgeous main deck, the lounge, the group of green ornamented columns, and the. luxury of the cabin suites being the last word in perfection.'

The Hoir. Alexander Shaw and Lady Margaret Shaw sat at the 'head of the table at the official luncheon, which was attended by 300 guests, as the ship lay at anchorage in the Mersey. The Hon. Alexander Shaw announced thn + Lord Inchcape had passed a very good night, an announcement which was received with an outburst of applause. He then spoke impressively of reparations and war debts, mentioning that he had to be cautious as a director of the Bank of England. He said that it should never be forgotten that while America remitted 18 per cent, of Britain’s war debt liability, Britain as creditor had forgiven the Allies 70 per cent, of their war debts. Britain in old wars frequently granted subsidies to her Allies, not as a loan, but as a free grant. In the Great War, where an American shell was fired by American artillerymen from American guns, the United States did not charge against the Allies either her soldiers’ pay or the cost of the gun or shell, but where an American shell was fired by a British or a French soldier it created a gold • debt due to the United States. The same extraordinary rule held between all the other Allies, and never in history was lopsided commercialism so misapplied. He did not believe that the masses of any country thought then about repayment or wanted it; they gave their money, their energies, and their lives for the common cause. He paid a tribute to America’s part in saving the freedom of the world, and he said he could not imagine that she would now insist on a course which would postpone the recovery of Europe, and, indeed, of the whole world. He described the problem as a twofold collection of transfers. The nations were confronted with the fact that there was not enough free gold in the world to meet the bill for reparations and war debts, which must, therefore, be paid in goods and services. The total value of these goods spread over 50 years, with which to pay America if she insisted, would amount to the equivalent of £4,500,000,000. This continual drain of goods, besides being unwanted, was dislocating her own production and impoverishing America’s foreign customers. As regarded the money market of the world the symptoms were those of a general malaise, punctuated with panic, and an atmosphere of menace hung over Europe. Distrust gave rise to armaments, and these to more distrust and stagnation of industry. It was no exaggeration to say that the economic and social structure of Europe was daily moving nearer a precipice. Europe was iu a position where willingness to pay, however admirable, was no longer relevant. “ The blunt truth,” he said, “ is that if things go on as they are going the. choice will simply be between repudiation and chaos. May I suggest a healing message spoken long ago, ‘ forgive us our debts as we forgive our debtors.’ These words teach us a wise and the only practical economic policy.” He had spoken plainly because these were no times for false and easy optimism.