GERMANY’S NOTE

Southland Times, Issue 18970, 18 June 1923, Page 5

GERMANY’S NOTE

“GET BACK TO BUSINESS'’ MR LLOYD GEORGE ON REPARATIONS DEADLOCK [The following and all Mr Lloyd George’s articles are copyright by the United Press Association in America (all countries L copyright in Australia and New Zealand by the Australian Press Association, copyright in Great Britain by the Daily Chronicle. Reproduction in full or part is prohibited.] (By Telegraph—Press Assn. —Copyright). (Australian and N.Z. Cable Association.) LONDON, June 15. Mr Lloyd George writes:— The Germans have tried another Note. Psychologically, it is a decided advance on the first Note. It is crisp and condensed, and does not indulge in the irrating processes of an argument. You should never attempt to argue with an angry man who is brandishing a bludgeon. The second Note avoids this provocation. It also suggests a number of substantial guarantees for the payment of interest on loans to be raised for reparation purposes; but this array of securities, standing alone, will not entice the investor to risk his money in a German reparation loan. He will look at Germany as a whole, not in parts. The investor will want to know what is likely to happen to the country during coming years, to its industry, finance, politics, and people. A railway which collects its rates and fares in corrupt currency is no use as a security for any loan. Customs revenue collected in fugitive coin is equally worthless. The only reliable basis for a loan is a stable Germany. You cannot have a stable Germany until you settle the reparations ; hence the propositions that really matter in Germany are not those which bear on the fixation of the amount Germany shall pay. The Note suggests that further discussions should be by conference rather than by interchange of Notes. How can any unprejudiced person refuse to recognise the essential reasonableness of this? It is common ground. The annuities imposed on Germany in May, 1921, demand modifications. Even M. Poincare proceeds on that assumption. There is therefore a most important but highly difficult figure to be ascertained:—What annuity can Germany pay? Is it unreasonable that this question should be referred to a tribunal that will give it calm and judicial consideration? If this were a business or trade dispute, the proposal would be regarded as eminently sensible and fair, and the party rejecting it would be condemned by public opinion. At the date of writing this article the French Government has not officially expressed its views on the German Note. One may safely assume from past experience that the Parisian journalists consulted the Quai d’Orsay before writing critical articles and criticisms. They declare that France will not discuss the German proposals until the latter withdraws her passive resistance in the Ruhr. If this imports acquiescence by Germany in the occupation and exploitation of the Ruhr until the reparations are fully paid, the position is hopeless. I can hardly believe that the French Government means to insist upon this, in spite of Le Temps’s article bearing that interpretation. They may only ask that, while the terms are being discussed, an armistice be concluded, the first condition whereof shall be that all obstacles in the way of supplying France, Belgium, and Italy with reparation coal and coke shall be withdrawn. An armistice on such terms ought not to be difficult to arrange, especially if the French and Belgian authorities withdraw the ban on the export of Ruhr products to unoccupied Germany. Unless The terms be mutually accommodating, I surmise that the German Government will have insurmountable difficulty in persuading the stubborn miners and railwaymen to assist in furnishing products denied to their own fellow countrymen. It is too readily taken for granted that the Ruhr workmen will obey Berlin decrees. The Wilhelmstrasse no longer commands the respect of pre-war days. Still, a conference should experience no difficulty in fixing stipulations that would make it possible for France to enter a conference on reparations without suspicion attaching to Ministers who lowered the national flag. What are the objections to the fixation of annuities and guarantees for payment put forward in the German Note? It is net a German method, but an American method adopted by the German Government—a conference with an impartial tribunal. If the conference fails I know of no other way except a resort to blind force. It is objected that, as the Reparation Commission was provided for that very purpose, to create another tribunal would be to supersede the Treaty. There are two answers to this contention. Firstly, the Commission as at present constituted is not the body to which Germany agreed to refer such questions. It is not the body Britain and the other Allies contemplated. The withdrawal of America completely changed its character. No man in his senses can pretend that the Reparations Commission in its mutilated form is either impartial in its composition or judicial in its methods. The American proposal »is very moderate. It implies the restoration of the Versailles Treaty by reintroducing America to the body that settled the reparations. If France objects to the appointment of a separate body, why should not the Allies agree to that? The representatives on the Commission, with an American nominee added, would be the tribunal whatever the French view may be in regard to the suggested annuities and guarantees or an impartial Commission. It is inconceivable that they should reject a conference. It is the surest road to reparation. It is too early yet to estimate the loss through the explosion of the Cannes Conference, but all idea of discussion has since been loftily and petulantly dismissed as an exhibition of pernicious weakness. What has been substituted for it for twelve months was a rather ridiculous display of “feather rattling” about a farmyard to inspire terror, and threatening speeches full of ominous hints of impending action. Every speech cost France milliards in postponed reparations. French opinion naturally insisted on action; hence this rash invasion. At Cannes a two years’ moratorium would have been accepted as a settlement—already eighteen months of this period would have now elapsed. German finances would have been under strict supervision; the mark would have been stabilised, and loans negotiated which would have substantially lightened the Allies’ burdens. Germany is not in a position to pay now what she was able to offer then. These eighteen months have been devoted to assiduously reducing Germany’s capacity to pay her debts. At the time of the Cannes Conference the mark stood at 770 to the £1; now it stands at 338,000 to the £l. Germany will require an extended moratorium to recover from the clumsy mishandling of the papt eighteen months. It will take the debtor a long time to recover from her bruises and loss of blood. What an achievebent in scientific debt collecting! If the reparations are ever to be paid, the Allies must retrace their steps and get back to the conference. So, for everybody’s sake, ■top strutting and get back to business.