The New York herald., 1921-03-02

tente hopes TO gain by further occupa-
ton of German terrr,ory -ince ulti-
nately England and France would lose
more by such a move. than would Ger
many.
They infer they are confident the
Allies will see this, and they are count
ing on this for an adjustment and COM
plete understanding ultimately.
If the Germans have any fears for to-
morrow they did not show Il tonight
and If. as Premier Lloyd George said
they completely misunderstood the
realities of the situation. they under
stand them no better now.
The German proposal 10 begin with
an International loan OF 5000, O00. 900
marks gold on the reparations balance
Of 10000, 100000 marks gold is recog-
nized here as. shrewd play toward
that school Of bankers and economists
who favor an economic accommodation.
but 1t was the British, before the
French. who recognized in the accom-
pauying conditions that the loan would
be at an artihcially low rate of interest
and exempt from tax, and that such an
offer foated In the markets OF the world
would mean bitter depreciation of
every allied war loan and other allied
governmental security.
There Is some disposition both IN Brit
ish and In French quarters to support
the German proposition that the entire
basis OF reparations should be remod-
elled after 1921.
But there is nothing but a. menace
seen in the German remarks upon the
IL per cent. additional reparations from
German exports and free trade. They
are seen as pure effect to inject Ger
man goods into the world markets at a
price ruinous to competition. And there
Is full realization in both British and
French quarters that however closely
the German argument IN the beginning
approaches the Paris decisions it makes
a wide difference as it works out
Look to United States for Loans.
While the first premise that the Paris
decision represents capital sum of 50.-
900. 0o0. 900 marks gold at per cent
and might be accepted by the Allies, it is
obvious that the German reason .ng from
this point forward devolves upon the
Allies the entire burden of carrying the
discount OF this sum at a highly arti-
ficial rate.
There is a further wide divergence OF
opinion regarding the value of the Ger
man payments already made. The Rep
arations Commission is unanimous that
they do NOT amount to the 10000, ,000,-
900 marks gold claimed by the Ger
mans, but have set the figure at only
one-tenth of that total.
An important parsonage. asked by THE
New York HERALD correspondent to-
night whether the Germans had further
proposals which they would make in
view OF the allied stand to-day, gave
the impression that Dr. Spnons still
might yield something more~than he in
dicated in his counter-proposal 1t was
explained, however, that DR.. Simons was
not given plenary powers by the Berlin
Government and supposedly could not
accept or reject proposals which went
further than h.s instructions.
There is no doubt tsat the German
proposal for an International loan en-
visaged the United States. Even though
the Germans believed the United States
would not enter directly into such a
loan they are counting on commercial
credits direct from America and on
commercial credits extended by Scandi-
navian States and other neutrals that
will enable them 20 take up direct Ger
man credits. This hope by no means
onviates the desire on their part that the
United States take an important part in
direct German loan, particularly IL
that loan was indorsed by an allied con-
sortiun of some sort.
Late tonight the Italians seem more
ready TO yield TO the German proposals
than do any of the other allies. II ia
known that the Italian experts were i'm
pressed TO some extent by DR.. Simons's
argument, and. above all, are anxious
70 get matters settled at tlis conference.
The anxiety OF Count Sforza, Italian
Foreign Minister. Is undoubtedly die
tated by the somewhat disduieting do
mestic political news from Rome. ard 1t
also is true that the Italians stand more
in readiness than any OF the other allies
to resume some sort OF actual business
with the Germans.
In so far as military operations re-
suIting from the proposed enforcement
OF the sanctions are concerned. IL Is
generally believed here tonight that no
seriois German opposition would de-
velop IL Marshal Foch should lead an
advance into the Ruhr region or else
where in Germany. What is feared Is a
coup d'etat by the radicals of the Left
group In Germany. in which the mon
archists would play the same kind OF
role they played In the wolfgang Kapp
revolt just year ago this month