The Waikato Times With which is incorporated The Waikato Argus. FRIDAY, MAY 21, 1920. GERMANY’S LIABILITIES

Waikato Times, Volume 92, Issue 14368, 21 May 1920, Page 4

The Waikato Times With which is incorporated The Waikato Argus. FRIDAY, MAY 21, 1920. GERMANY’S LIABILITIES

The official statement which has been published of the conference between Mr Lloyd George and M. Mille;.--and shows that the two Prime Ministers have been considering the question of the indemnities to be paid by Germans', and they make a series of remarks thereon which arc very true. They say it is to the general interest that reparation should be made for the losses and damage due to war, and on the other hand it is desirable that Germany should regain financial autonomy by a speedy fulfilment of her obligations, for that purpose they say it is desirable that a minimum total should be tixed for payment; a sum which shall at the same time be acceptable to the Allies and be within Germany's capacity to pay. Experts w.i! be appointed to draw up proposals, both for the amount to be paid and ttie manner in which it is to be divided amongst the Allies, an,] these proposals will bo submitted to the Allies for their approval. The' proposal and the means by which it is to be carried out are botii matters which it was commonly understood were agreed on at the Versailles Conference, and were embodied in the Peace Treaty. The oive difference is that the two Prime. Ministers now agree that a definite sum must be fixed, whereas tweu'c months since they proposed to set up a Commission which should ascertain year by year the utmost sum that could be exacted from Germany inu demand its

payment. It has been pointed out by experts of all kinds that the fxing of a specified amount was urgently required in the interests of Use who!~ world ; and that the Allies were as much concerned in this as the n.iti.Ts whi*!i had to pay, and it may fairly be said that the Prime Ministers are almost ths last people to be converted to that view. They have, however, laid down sound doctrine now, and Ihc world will await the Commission's recommendations with interest.

The reasons for the fixing of a definite sum afee both material an.l • psychological. ' On the one hand Germany could not raise capital anywhere while tiiere hung over her head a liability of an unknown amount. Hsr capital had disappeared and her credit was greatly damaged. A merchant in . America who might consider reopening trade with a merchant in Genr-any with whom lie had formerly done business would hesitate in view of the fact that the indemnity might make every man's position insecure. A man who has a £2OO mortgage on a £IOOO properly finds it hard to borrow more, and therefore Geninany could arrange no foreign loans, and could do ur.thing to help her people in that way. It was of primary importance lo know the amount of her liability, and whether it was within her capacity tojiay. On the psychological side was the effect which the anticipation of large indemnities had upon the Allies and upon the Germans. ! France has relied upon these In restore financial stability, and has not imposed taxation to an extent comparable with Britain. Italy has pursue! the same path, but not to the same lengths. Signor Nitti put the financial position openly before the nation at the time of their general election, but as his Government has fallen it is impossible to say what policy will Do pursued by his successors. The anticipation of large indemnities has caused both people to shrink to some extent from facing the situation. In Germany the people ar* less likely to perceive the reasons for payment as Ine lime passes, on every ground the payment should have been demanded promptly and tho amount fixed at the earliest date. Thai, it has stood for twelve months is tn;gic from the point of view of the world's welfare. We may, perhaps, guess at the reasons which will some day be made public. It is clear that t:ie amounts which have been talked of are impossible. £800,000,000 was the sum commonly spoken of at the time of tha Conference, and without any official sanction this sum was commonly accepted. It was even said that there were experts who placod Germany's capacity to pay at a higher sum still, but such experts have never declared themselves. Before the war Germany's imports exceeded her exports ;y £300,000,000 per annum, and how that amount is "to be turned into a surplus export of £400,000,000 would be beyond the power of any expert to show. Yet this would be but the in tores', of the debt, and would provide 'nothing for repayment. Any such sum is obviously impossible, but if so what is to happen to Governments who have allowed their a people to expect their share, of such a sum. It may be asked why Mr Lloyd George allowed this question to stan.i unsettled, considering that England had. never relied on the hope of indemnities to aid her finances. Unfortunately Mr Lloyd George had conducted an election campaign in the cry of "Hang tint Kaiser" and "Make the Germans pay for the war," and as the first had. been abandoned, it was desirable Lo postpone the date when the second aim would be shown to be impossible. The postponement has worked great evil i;. Central Europe, and the same thing to a lest extent among the Allies. It is not a matter for regret that Genially cannot pay the sums expected. An indemnity will do more harm than good to the country that receives r.. There is no shape which it can tak(j other than the export of goods, and in the case of Germany of manufacture 1 goods. If we can fancy her sending goods for twenty years to France and Italy, of which half the value is retained for indemnity, there would not be a : manufacturer left in either country, for they could not compete with such, goods. Both countries might be wealthy, but they would be dependent on Germany. England's export trade* with both countries would fall to something very small for the sirne reason.*. It is quite true that Germany would bo impoverished. People do not grow rich on supplying goods for halt payment, but they would be in a sounder position than if they relied on others. Franca would do well to recognise a fact vhicH was demonstrated by the indemnity sh* paid after the Franco-German war. In, his election campaign Mr Asquith said that for his part he would abandon any claim Which England inigni have in the indemnity, and that is what will probably happen, although in this nr.dter indemnity must not be confounded with reparation for damage done. Payment for that should be enfarced at th* earliest date, and when chat is done it • would be well if indemnities went the way of the Kaiser's punishment.