REPARATIONS PROBLEM.

Poverty Bay Herald, Volume L, Issue 16405, 11 April 1924, Page 5

REPARATIONS PROBLEM.

A PRACTICABLE SOLUTION

OK R AIA NSD IS API* O INTER

(Elec. Tel. Copyright—United Press Assn.) (Australian ami N.Z. Gable Association. i LONDON, April 9.

The Morning Post’s Paris correspondent says, “.Judging by to-night's newspapers, French opinion is prepared to approve the experts’ plan as ottering tiie- most practicable solution of the reparation problem that may now be expected. This attitude can he taken as representing the majority of the population’s viewpoint. .Satisfaction chiefly attaches to the experts’ unanimous decision that Germany is really able to pay substantial reparations. If, as France hopes, the experts’ plan can he linked up satisfactorily with the solution of the Allied debts problem French opinion is unlikely to prove recalcitrant. The Daily Express draws attention to a. clause in Air. Dawes’ covering letter, affirming the principle set out in the Versailles Treaty that Germans must be taxed as heavily as the 1 subjects of the Allied countries. The correspondent emphasises the fact that M. Barthou, chairman of the Reparations Committee, when receiving the report, said, ’‘Although your conclusions are unanimous you cannot expect they will command unanimous approbation from ail opinion shaken by such passionate politics and by such- eountrary interests.” The Daily Telegraph’s Berlin correspondent says: “To-night's papers abstain from comment, in the absence of tlie- full text of the experts' report, though the decisions will gravely disappoint Germany. Regarding the estimates of her capacity to pay, publicmen and the press are likely to be most cautious lest the final settlement he endangered. The report arrives in the midst of a curious financial crisis. The l Reichsbank decided to confine discounting- to- bills received prior to April 7. In other words, the supply of domestic credit lias dried up, and German industry must therefore look abroad for sorely-needed capital. Industrial and financial leaders therefore will think twice before adopting an intransigeant attitude, as adequate foreign capital is unlikely to be available till the reparation question is settled. OPINION IN AMERICA. THEI FOG- LIFTED. (Australian and N.Z. Cable Association.! NEW YORK, April 9. Expressing the conviction ’that tlie Dawes report would provide a working basis for the solution of Europe’s problems, bankers and business leaders praised the recommendations as a constructive step towards the stabilisation of commerce and finance and a. valuable contribution to peace. The measures suggested for the stabilisation of Germany’s currency aroused great interest among bankers. The provisions for the establishment of a central bank of official rate of exchange and discount and the adoption of other currency control devices, bankers said, was a step as revolutionary as the establishment of thei Federal Reserve system in the United States. s

The Pittsburg Gazette-Times says: Experts suggest an international loan recommending 5 per cent., bonds. But will this return attract investors, when Japan recently paid in excess of 7 per cent?

The Milwaukee. Sentinel says: Tlio reparations problem lias been clarified by business intelligence and the political fog lias been lilted and a vast intricate subject analysed in the clear light of sound economics and sane finance.

Tho New York Times’ Washington correspondent says that comment, on the Dawes plan is naturally reserved, since official circles are still studying it in detail. However, they expressed gratification over the fact that the experts had been able to reach unanimity. The hope is also expressed that, the plan may, finally, effect the rehabilitation of Germany.

Mr. Hoover pointed out that the reparations settlement, provides the principal harrier to tho economic recuperation of Europe, and has been responsible for most of the ovils which the world has suffered since the war. He added that if the Commission has now secured a just and practical settlement, tho whole world will benefit.

The correspondent states that officialdom, while liot prepared to say whether Ihe plan is likely to prove acceptable to the Allies, nevertheless believes that the, experts’ integrity and connnonsense will disarm partisan criticism abroad and rapidly consolidate public opinion, which in itself should do much to secure a settlement. Mr, Julius Barnes, President of tho United States Chamber of Commerce, said that tho plan may reasonably be hoped to be the l>asis of a, permanent settlement,, because it chiefly aims to establish conditions wherein industry may begin to operate. FINANCIAL PROPOSALS. CONTROL OF BANK AND RAILWAYS. RESTRICTION OF REMITTANCES ABROAD. GERMANY TO FLOAT FOREIGN LOAN. (Reuter’s Telegram.) PARIS, April 9. The Dawes report states that a German president and board will administer the bank, while the general board, composed of Germans and foreigners —one each of British, French, Italian, Belgian, American, Dutch, and Swiss—will be given broad powers. One of the members will be a commissioner who will see that the provisions of the law in regard to its issue of notes and the maintenance of reserves is observed. The schedule of payments by Germany recommended by the experts corresponds to the second alternative previously cabled, except that, 25C0 million gold marks is mentioned in the fifth year and onwards instead of 2460. The liability of 1200 million gold marks in 1925-6 and 1926-7 will be reduced or increased by the maximum of 250 million if the proceeds from the controlled taxes and Customs duties on alcohol, beef, tobacco, and sugar, fall short of a milliard by one-third deficit, or exceed a milliard by one third excess. A corresponding provision, is made for the reduction or increase of the liability of 1750 million gold marks in 1921 8. The whole schedule of payments will begin to run only as from the date Germany regains full economic and fiscal sovereignty of her territory, payments to he available not only for reparations but /or peace treaty charges and interest on any loan.

The railway company controlling the German railways will he administered by a board of eighteen members, half nominated by thci trustees appointed by the Reparations Commission. The managing director will be a German, but a foreign Commission will be authorised to take measures. If service bonds cannot be assured the Reich should provide five milliard gold marks and debentures of industrial concerns, carrying interest at 5 per cent., to be administered by the Reparations Commission. The trustee of controlled taxes, already mentioned, will be under a foreign

commissioner with a sub commission for each tax.

As regards deliveries in kind, (lie experts declare, that during the first two years the deliveries will be automatically limited. Thereafter the programme will he considered by a- transfer committee consisting of a. representative of the Reparations Commission and five foreign exchange experts from Britain, Hie United States, France, Italy, and Belgium, who will apply the bank balances deposited in the new issue, the bank to account to- their agent for reparation payments, payment of deliveries in kind, and (he purchase of foreign currencies. As funds cannot be remitted abroad without unduly prejudicing the foreign exchange market, they will bo accumulated in Germany up to a maximum of five milliards of gold marks. When that limit is reached the annual payment- by Germany in her own currency in respect to peace treaty charges will be reduced to an amount which tan be remitted abroad yearly. Thus, if the annual liability recommended by the experts proves to exceed the surplus which Germany is able to create, the annual burden will be automatically reduced to the amount of such surplus. An essential part of the scheme is that Germany is to issue in the first year a foreign loan, of eight hundred million gold marks, in order to provide currency stability, and finance deliveries in kind during the period of economic rehabilitation. GERMANS GRATEFUL TO EXPERTS. lTb*j Times.) (Received April 11, 19 a.m.) LONDON, April 10. The Berlin correspondent, of the Times says that Berlin naturally is grateful to the experts for their clear, categorical statement of the necessity of economic sovereignty and the unity of Germany in occupied and unoccupied territory alike. , There is some adverse criticism of the scale of payments. Generally, however, the proposals are fairly well received in financial and Government circles.

BRITISH OPINION

A SOLID ACHIEVEMENT.

TERMS, WITHIN GERMANY’S

ABILITY TO BAY

(Australian and N.Z. Cable Association. 1 (Received April 11. 11 a.m.) LONDON, April 10.

The experts’ report lias been received in London as the most prominent signboard so far erected on the reparations road, rather than as in any way indicating the end of the. journey is near. Apart from Germany’s attitude, the newspapers anticipate the most likely snags to arise will be, firstly, fixation oi the total sum payable by Germany, which the committees were forbidden to discuss; and secondly, oblique references to the absolute necessity for France to abandon economic control of the Ruhr; but as a. business proposal the reports are hailed as a solid achievement. Moreover, they are encouragingly unanimous. Several commentators remark that the payment of 125 million sterling annually would severely strain any nation. Nevertheless the concensus of opinion plumps for adoption of the reports and a belief that, the terms are well within Germany’s capacity to accept.