The Seattle star. [volume] (Seattle, Wash.) 1899-1947, 1921-02-05
CE:RMANY'S
INDEMNITY
FAIR? WAIT!
World Markets Will Pass
Final Judgment, Says
Bernard Baruch
by HARRY II. HUNT
Downright. fgsn


BY HARRY n. HUNT
Copyright i9sn
WASHINGTON. Feb. Sis the
German PREPARATION agreement
reached By tho allies within Ger
mans ability to pay. and II 90. what
wtii be the effect on economic con
ditions generally OF having the
amount OF reparations and tho terms
a payment definitely fixed"
a Bernard NJ. Baruch. economic ad-
visor OF the American peace mission
70 Parts when the treaty was drafted.
and one OF the American members
on the reparations commission. didn't
give any snapshot answer. He did
quite a bit OF figuring and put thru
several telephone calls before he
answered
SUMMONS SKILLED
STATISTiCiANS To HIS AID
HIS figuring was done 20 trans
hate into American dollars the
amount OF indemnity the allies now
agree Germany must pay and TO de-
termine how great capital charge
would have 20 be set aside by Ger
man industry In order To amoruse
the sss. ooo. ooo. 900 gold marks In inc
next ~ years
His telephone calls summoned 10
his aid expert statisticians and also
nut him In touch with officials from
whom he obtained details OF the
agreement which have not been car
ried by press dispatches
well" he finally announced.
-sfrcm the facts In hand. I would say
thnf the total amount OF the repserf.-
lions looks pretty stiff.
- Merely because Germany may ao-
cent Il. and because the allies say u
b acceptable. does not mean thai
huaness men generally thruout the
world win so regard H.
The real story Of whether me
rcparations agreed on arc reasonable
q excessive. viii be told within the
knext few days In the worlds markets
sThat viii Be the real and only
dependable gauge
If GERMANY ACCEPTS
WORLD WILL REVIVE
III Il II q sum within Germany's
ability to pay. and II she accepts this
arrangement In good faith, and not
simply because she has to. and. fur
Their, IL II meets the approval Of bust
ness men and financi~rs. there is
sure 60 be an Improvement In world
vide economic conditions
There has already been a rise In
exchange In anticipation that the set
tlement would be reasonable. There
would be . further rise. with a tend
ency over q period Of time slowly TO
approach normal
This would increase the credit
facilities Of all nations involved and
wSmproye their buying capacity and
their Sbflity to exchange commodi-
ttss with one another. II would tend
b Increase the wealth Of the world.
ana. therefore. increase the ability
10 lensen the percentage OF taxation
because Of the Increased taxable vol
me--
The big load Germany must carry
In meeting the PREPARATION payments
demanded. Baruch points out. Is no,
primarily the amount Of cash she
must pay out
A capital sum equal to the debt
America incurred In the war. at
pr cent interest over 4. years. would
Just about equal tho total Of the cash
Indemnity.
But by stripping Germany pf her
shipping. by imposing I.'1 per cent
tax against the total OF her exports.
By requiring that she deliver to
France large quantities OF coal. and
By similar limitations on her indus
trial expansion. the difficulties OF
making payment are multiplied many
fold.
"A capital gum Of $3.50. 900 900
eoid marks" said Baruch. turning
thru memoranda brought him by his
statisticians, III placed on interest
~ per cent for ~ years, would
amount to 2zs 900. oo0. 900 marks. the
ramount Of the cash indemnity.
AMOUNTS IN ROUND
SUM TO II BILLIONS
That amounts. In round figures TO
~ billion dollars Germany already
has paid about $500 .Ooo. 900. That
makes a total capital investment Of
. little less than SIS 200. 900 .oo0--or
approximately the amount Of bonds
Issued by America for the war, In
Guiding the loans TO tho allies"
rs there any dependable basis on
which to estimate the amount that
will be produced by the 1871 per cent
tar on exports7" Baruch was asked.
mo dependable basis he replied.
"Of course, II her exports returned
to the pre-war normal, or there
abouts. II would mean perhaps a bill
lion and a quarter or a billion and
. half marks annually.
This tax. Of course. affords a
tariff protection against goods ex-
ported from Germany. This becomes.
however. a tax on the American con-
sumer Of goods.
Germany collects II. but II goes
into the treasury Of the allies. not
into the treasury OF the United
States. as would similar protective
tariff imposed by us against. German
manufacturers. This tax will have
the effect Of increasing prices and
iessening exports-
The wisdom OF this action may be
open 10 criticism because Of the tend
ency II would have 70 lessen the vol
ume Of German business and 10 make
the amount indetermlnable.
Incidentally II might be pointed
out that America stands In differ.
ent position from any OF her asso-
ciates In The war under this export
tariff provision. The tariff must be
paid by America on Gerrnan.made
goods purchased and the money goes
10 the allies. England or France.
however. purchasing the same goods,
pays the tariff. OF course, but gets
II back in the form Of reparation pay.
ments from Germany.
NIGHT EyFrx Help