The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-02-01
PREPARATIONS SEEN
|AS GRAVE PERIL TO
BRITAN'S EXPORTS
Financiers and Economists
Fear Germany Cannot
or Will Not Pay.
MUST PUSH TRADE
Only Hope to Meet Demand
Is to Increase Its For
elgn Commerce.
PAIsH FOR MODERATION
Insistence on Present Claims
May Prove Fatal to Set
tlement, He Says.
MUST PUSH TRADE
PAIsH FOR MODERATION

Special CobIe to THE New Yosx HEDLD.
Copyright, 1881, by THE NEW YoHx HzsALp
New York Herald bureau.
Lsnds0. Jaa. 81.
Sentiment in Great Britain Is pessi-
mistic regarding the workability OF
the reparations agreement arrived al
by the Premiers Of the Entente Pow
ers, In Paris. Tho belief was expressed
In many well informed circles here
to-day that Germany could not OF
would not pay. Especially was this
sentiment found among financiers
and economists.
John Maynard Keynes. author OF
"The Economic Aspects Of the Peace" !"
writing in the Manchester Guardian
argues that the only way Germany
can pay tho reparations, demanded OF
her is by very great increase in heI
trade with foreign countries. which
would result, Mr.. Keynes insists. in
tho probable destruction Of the export
trade Of some OF Great Britain's old
established industries, forcing them
out of the markets Of the world. Mr.
Keynes declares that the reparationi
agreement BY the Allies Is "a meaning
less variation on an impossible figure :
Sir George Paish. English economist
told THE NEW YORK HERALD correspond
dent here to-day that It was practically
impossible for the Entente Powers te
raise credits In anticipation Of the an
nual instruments extending over forty
two years.
The needs Of the Entente In 20 far a.
credit II concerned are urgent Sii
George said. Therefore the reparations
plan does not meet the necessities OF ths
case. What France needs II money fo'
the reconstrpction Of her devastated
areas. II man came to mo and asked
ID ron think ! would. he tustfled =
Advancing money against tho possfbii'
ity Of Germany ultimately paying tws
tbousand million pounds steriinSr
would say yes. because believe Ger
many could pay that amount. but Il 4
comes to making the same propositior
in connection With advancing money
against a German debt of eleven thou.
sand million pounds sterling. would
say no, because am very doubtful thai
Germany could pay II.
VIII UnAersell the woRlA.
The payment of so large a sum will
keep the standard Of living In Germany
down 30 low for such long time that
II will enable the Germans to undersell
every other nation in the world unless
the standard Of living and the wages
In the rest Of the world are similarly re-
duced. In this case It would be impos-
sible for Germany to make her repara-
tions payments, as she could not export
enough goods TO meet them, because II
wages were at a worldwide level. COM
petition would prevent German dumping
1T should be clearly understood. d.
rectiy and indirectly. that reparationi
payments can be made only by the ex'
portation OF German goods or by Ger
man services"
Sir Georges idea Is that there should
be a moderate annual payment which
the Germans might accept willingly and
one which would allow her to maintain
her standard of living and at the same
time permit her restoration. but, he holds
that heavy reparations payments such
as are demanded. and which extend over
long period of time, will only serve
to cmbitter the Germans He asserted
there was a possibility that Germany
would Sign the demand BY the ALLIES
and then retire to adopt a policy of
passive resistance. which would mean
that the Entente would never be paid.
Opposes Export Tax.
Sir George referred to the American
silver panic In the eos and continued:
The same thing would happen on n
much larger scale all over the world
because payments by Germany would
mean the pauperixation of industries
with no chance for them to recover az
long as the reparations programme pre-
vailed.
"As free trader I am particularly
bitter against the IL per cent. ad
valorem export tax. II such a duty were
placed to pay off the whole rcparations
debt II would have been sensible. but
this duty simply means that the con-
sumner will have TO pay the tax. because
Germany will increase her prices to
that extent. All the burden OF the tax
will fail on. the nations receiving Ger
man goods"
Politicians here showed a marked ret
iccnce when they were asked II they
would comment on the decision by the
allied Premiers 9n
y. ~ Thomas. a prominent member
OF the National Liberal Club. said the
general opinion Of members of that or
ganixation regarding the rcpsrations
plan was one OF decided scepticism.
This. he added. was not so much due to
belief that Germany was unable to
pay the amount demanded as to the
possibility that France. after two or
three weeks. will demand more than the
sum fixed In Paris last Saturday. In
word. Mr.. Thomas said members Of
his club were afraid France would not
be satisfied.
At the Reform Club. the independent
Liberal opinion was that the Germans
would not pay. II was pointed out by a
Continued on Fourfh Pore.