New-York tribune., 1921-12-18
Reduction of Deficit Is First Duty
In Cernany's Move Toward Recovery

trial interests who are enjoying
direct advantage from low Transports
ton rates. This transfer will remove a
constantly increasing source Of drain
on the treasury Along with it there
Of all kinds, even though they tempo
rarily work to the disadvantage of
Germany in the export trade Ex-
change stabilization are the stakes.
llnI addition, it is becoming increas-
ingly clear that reparation payments
in cash, as requested under the peace
treaty, will not be Forthcoming as
contemplated. A study of the means
whereby the German government made
its first payment shows how futile it is
to expect that many more such pay
ments in cash can possibly be made.
Already the Reparations Commission
agreed to postpone the payment due
November Is to December /, and it is
alarmed over the prospects of payment
thereafter. The Allies must fact the
facts of the situation bloodedly,
as scientists called upon to make an
analysis of vexing problem. 1t is
practically the consensus Of opinion
that reparations payments in cash can
only be made for a short while, and
then only through the medium of the
printing press, which in turn will ex-
ercise further disastrous influence on
exchange. Germany must be given a
breathing spell; it must be given an
opportunity to put its house in order,
and this it cannot do under the present
conditions. While a complete mora
torium, as called for by some Ger
man statesmen, IS not imperative at
the present moment, arrangement
should be made for deliveries in kind
along the lines of the Loucheur-
Rathenau (Wiesbaden) agreement,
whereby construction materials will be
forwarded to France for the upbuildi
OF devastated areas. These deliveries
will temporarily involve a further in
crease in paper issues, for, the German
government will have to pay her own
manufacturers and producers in paper
marks, but with her taxation program
energetically followed up and pay
as-you-go" policy gradually restored,
the annual budgets should be able to
take care of reparations liabilities
without the aid of the printing press.
Foreign loans are out of the question
at present.
Time to Recover
Deliveries in kind presuppose the
power absorption; it is a somewhat
slower process, but it will give Ger
many time to recover. 1t involves, of
course, the introduction of German
goods into Allied countries which will
compete with their own national in
dustres, but these are matters of vary-
ing complication which will have to be
decided Individually when they present
themselves.
timatey the whole reparations
question will have to be re-examined
IN the light of recent developments,
based on scientific analysis of Ger
many's real capacity to pay and devoid
of sentiment and bias. The wish can
not be father to the thought in mat
ters yhich bear on the welfare of not
only a nation of 60,OOO,0OO individuals
but also on the whole world indirectly.
This reconsideration will have to take
cognizance of the financial situation
OF the Allied countries, particularly
France, whose fiscal integrity is closely
interviewer with the whole reparations
question.
1T is not here maintained that the ap-
plication of the above remedies will
smoother out all difficulties and rein
troduce normality where chaos ruled
before. This is far from what NAV be
expected to result. They will only
serve for the immediate present to sta
Dllize an element that has proved to be
highly disturbing to trade and has
been instrumental in bringing Germany
to the verge of bankruptcy. They are
not the ultimate solutions. They are
marely paliatives and not permanent
cures Complete revision of the legal
definition of the mark is one of the ul-
innate alternatives, with extenuating
provisions for foreign holdings, and
the other is foreign participation in
German property and industry, both in
respect to ownership and management.
The former involves contiscation on
wholesale scale, but at least it will be
removing a fiction that is constantly
working harm. The second involves ma
tlonal and international considerations
OF momentous nature.
Debt Reputation
Revision of the currency means
wiping off the slate and starting anew
with the past entirely forgotten. 1t
carries with it redistribution of
wealth and it is synonymous with debt
reputation, but it will be the repudia
tlon of debt that is held internally
and never in history has internal re-
pudlatlon caused the destruction of a
nation. 1t will be more popular than
the other alternative, for as is we'll
known the German war loans were
mainly derived from bank resources.
considerably less than 10 per cent of
lnn