The Washington herald., 1921-02-04


negotiations are worth review
Germany has pay an indemnity She
has agreed to pay an amount covering all the dam
ages to the civil population of the allies. The sum
of proved damage is three or four times as much
as the allies asking her to pay The prob
lem is therefore how much Germany can be made
to pay and still maintain stable government
No wishes to see her released from a penny
short of this amount.
The demand of the allies is for $4,000 900, 900
in payments AZ years, together with IL per
cent export duty On the basis OF average pre-war
exports, this export tax would amount over the
whole period to something like $40, 900 Or
say, to total indemnity Of $64o ,ooo,ooo even
did exports not increase. This amount is rough
average of SI,5ooYoooooo per annum. Payments OF
this amount over the AZ years would be equal to a
capitalized debt Of somewhere about $4,000 100000
The payment OF indemnities by any nation must
be made in some form of property that can be ex-
ported 1t is of to take the commodities or
property inside Germany, because they will have
to be turned into foreign exchange and must be
interpreted in commodity exports sooner or later.
Thus any argument as to the amount of in
,demnity Germany can pay comes back to the
rqueston of how much of a surplus of exports
be created by Germany over her necessary imports
The theoretical pre-war imports and exports OF
Germany about balanced During the last twenty
years Of national life however, Germany gained
greatly m her wealth abroad and no doubt imported
many commodities in the shape of diamonds and
other Injuries which she might do without
If assumes that the whole of German prop
.erty' abroad was double the amount seized by the
alien enemy custodians, it would indicate
growth in foreign wealth of'more than $4,000 900
a year, and it would to be liberal reduction
of luxury imports say that another $500 900
could be saved in this quarter. Beyond this, the
rehabilitation OF her army and navy gives her
some added productive power, probably not greater
than their previous cost, or say $I5o,oooooo year
Taking all these items together, there would
seem to be a basis of about $5ooooo,ooo year
which Germany could produce in surplus of her
necessary imports. Such record based on pre-
war figures, however, would follow only if Germany
had the instruments in the shape Of ships, foreign
credit, good will etc, which she formerly possessed
No one can say that under certain conditions
Germany would not continue to develop capacity
10 carry such load and that she might not in
thirty years be able to carry heavier one, but
taking $500, ,oooo 900 a basis spreading this sum
over AZ years. it would indicate about $50 900
of aggregate in total indemnity a capitalized
debt of about S8,ooo 100000 1t would appear there
fore that the sum Of $4,000 100000 plus $4,000
Doo 900 export tax which has been put up to Ger
many is somewhat high, and the ultimate figure
lies between these two.
There is question as to whether or not the
announcement of such of money is tot the
initial step in a trade, or alternatvey, that it has
been proposed in such large volume as would ap-
pease the sufferers of great wrong among the
allied celebrates.
The latter surmse has some corroboration in
the method by which the demand has been ex-
pressed, for the more customary manner would
nave been to express the amount in the form of
capitalized sum, which would not have been so
large In the vision of the allied taxpayers and
WOULD not have maintained their hopes Of real
Justice for the damage done by the enemy
There is economic phase in the matter
which will interest the United States. If Germany
IS to pay SI,5oooooooo per annum it can obviously
be done only by the export Of goods in excess of
The amount necessary to cover her necessary i'm
ports AS Germany's necessary imports of even
The crudest materials and foodstufs would prob
sbly into two billions per annum, it means
that she must find market for s. 500 ooo oooo worth
Df export goods as against, say S2,ooooooooo pre-
war export.
These goods must come into competition with
allied and American exports, and if Germany were
successfu in carrying out such program it would
be within time, measuraby by months, that the
Industrial populations of allied countries and
America would be crying out for tariff walls to
protect them.
The matter has perhaps interest to the
United States than to the allies, for the al
ies, shaVing standards OF living similar to Ger
nany's, will have IL per cent advantage in the
worlds markets against Germany, and the United
States, where standards of living are higher will
iavesa similar disadvantage in the situation
|. These provisions together with the complete
control of Germanys credit and the character of
ler imports during ~ years, would seem to be of
interest to the American people, and gentle
reminder that participation in the deliberations
pf the reparation commission and the allied con-
erence Pight have been worth few billion dollars