The Hartford republican. (Hartford, Ky.) 18??-1926, 1921-09-16

sidering the payment of the princi-
pal"
From the dangerous Charybdis Of
confiscatiou the writer we are quot
ing turns to the no less formidable
scylla of reputation. between which
the financial helmsmeu Of Europe are
finding It so difficult to steer. He
says:
zone very significant fact which
appears in connection with the Ger
man PREPARATION Agreement may per-
haps be found, in the final analysis,
to give the solution to this whole
problem. In arranging the repara-
ton payments, the Allies fixed what
they called a gold mark" This
gold mark" is an arbitrary unit Of
value roughly equivalent to gold
mark before the war. and fixed az /"
value equal to Is paper marks of the
present currency of Germany.
In other words, for the purposes
of foreign payments and foreign trade
the value of the mark will be stabil
lied at an arbitrary figure-fifteen
times the value of mark within the
boundaries of Germany.
"The governments of other Eu-
ropean nations could very easily do
the same thing. They could estab-
lish god francs or gold lire for the
purposes of foreign trade, customs
duties, etc They could then Fix an
arbitrary rate of exchange between
this gold unit and the domestic paper
money circulating within the coun-
try, just as the gold mark is fixed at
fifteen paper marks. In this way,
without repuGiating their foreign
debts or being at a disadvantage in
fol eign trade because of deprecated
currency. they could repay their own
people in money of deprecated value.
This, in effect. would amount to the
same thing as a reputation of GER
tain proportion of the domestic la-
tional debt, and would amount to a
levy on the private capital of those
holding government securities.
This. of course, would be unfair
and particularly unjust to those who
invested in government bonds before
and during the war, but many econ
omists believe that some such ar
rangement must be resorted to in or
der to enable these countries to meet
their interest payments and the prin-
cipal OF their debts. They are fac T.
ed with the dilemma of two evils and /
must choose the lesser of the two
Even with the present depreciation |
of European currencies the debts do |.
not seem so large when exprest in ,
terms of the deprecated currency at |
the present rate of exchange. For in /
stance. the debt of France which we /
have referred to above as being $50; !
OOO.OOO,000, is of course not $4,000 |
600 900 in dollars, but 25O.OOO,O OO,- |
900 francs. At the present rate OF |
exchange 100000. 100000 francs is
only about $21, 100000 more
than cutting the debt in half. If the
French deb tbs paid back in terms OF
this deprecated currency the pay
ments will not be nearly so hard to
meet.
OF course, it is not the present eX-
pectation of European governments
to allow this extraordinary deprecia-
ion of their currency to stand lndefi-
nitsly. but it might be possible for
hem to overcome the disadvantages
in their foreign trade of such depre-
citation by means of such devices as
he gold mark" which we have de-
;cribed above. And the conclusion
cannot be avoided that it would be to
heir advantage in paying off their
arge debs, if this depreciation should
'cmain uncorrected.