New-York tribune., 1921-01-31
'Baruch Finds
Real Indemnity
lis 21 Billions
This Sum in Cash Would
Give SIS, 900, 900, 900 by
Amortizing Interest at S
Per Cent Over 42 Years
Less Than U. S. War Debt
Close to Extreme Limit
American Experts Judged
Germany Could Pay
From The rribune's Washington Bureau

to Bernard M. Baruch, who was one of
President Wilson's economic advisers
at the Paris Peace Conference and q
member of the Reparations Commits
sion, the amount of the reparations, as
finally fixed by the Supreme Council
in Paris, Friday, viewed as a cash sum,
is really roughly $4,000, 100000, ex-
elusive Of the export tax and amounts
already paid, instead of $4,000, 900, 900,
which amount is virtually principal and
interest amortized over forty-two years
at per cent.
The SIS 5,0O0,000,0 900 amount advocated
by some of the American members Of
the Preparations Commission in the
winter Of 1919 was a capital sum pred
icated on the payment Of interest, as
were other amounts proposed at that
time If Mr. Baruch's view is accepted
it would appear that the Allied Pre-
miers prefer to lump principal and in
terest for the sake Of the more favor
able effect on public opinion in their
countries of $55,oO0, 100000, as against,
say, $21 900, 100000 with interest.
Less Than u. S. War Debt
Put in this way the penalty imposed
on Germany is less than the war debt
of the United States alone, paid off
with interest during fortytwo years
($2400O, 900 ,0o0).
When Mr.. Raruch, who is IN Wash
ington to-day en- route to New York
from an outing at his South Carolina
estate, was asked whether he thought
the amount fixed was reasonable, he
declined to answer definitely, but left
the impression that it was rather stiff
and made the following statement:
"The 226, 1000 100000 of gold marks
roughly $55 100000, ,000-is equal tc
present or cash payment of about
$21 900, 100000, which, with interest at
5 per cent, would amount to about $685.
000,000,000 in forty-two years. This
plus the amount of money already paid
under the treaty, amounting to some
thing over $500 100000, plus the Il
per cent export. tax, will be the amount
of Germany's payment under the
treaty.
whether this is wise settlement OF
not will depend upon the spirit ir
which it is entered into by all the
parties to the contract and whethe,
Germany can make the payments. Il
this will end the war, and each ano
every one will earnestly strive to make
it so, more than the money settlement
will be gained.
America, by failing to ratify the
treaty, removed itself from a partici.
patton in this decision, although neces.
sarily it must be of vital effect tc
American business.
Near Limit Of Capacity
"The gross sum of 276,000, 900 900 o,
gold marks, If accepted by Germany
will be very close to the maximum
amount judged by some of the Ameri
can delegation that she could pay, but
higher than some of the opinions ar
rived at among the American delegates
who participated in the discussions OF
reparational matters. But this was
based upon conditions as they then ex.
listed, and with the hope that German,
might be allowed to retain a reasona.
Bile amount of shipping and with the
thought that possibly Silesia would be
retained as German, and took into con.
sideration the $3,5oo, 100000 alread,
paid. There was no consideration Of
an addition export tax.
In addition, the tax Of II per cent
affords tariff protection in all countries
on goods exported to them from Ger
many. This is tax on the American con.
sumner of goods for that portion bought
mere, but 1t goes into the treasury o1
the Allies, after Germany collects it
and not into the Treasury of the Unitee
States, as would similar tax imposed
by our own tariff. This tax would have
the erect OF increasing prices and les
senlng exports. The wisdom of this
action may be open to criticism be-
cause of the tendency it would have
TO lessen the volume of German bust.
ness and to make the amount some
what indeterminate"
Discussing the effects of fixing the
amount of the reparations instead OF
leaving it indefinitely indeterminate
Mr.. Baruch said:
Signs of Recovery
LAS long ago as December 10 point
ed out that there were Indian signs
of recovery of business. One o1
these was the Improvement in foreirr
exchange, which was doubtless due t.
the belief that the Allies would agree
to fix the amount of the reparation.
instead of leaving them indete rminate
pointed out then that one of the
chief causes of business depression
here and elsewhere has been the slow
ness of Germany in resuming her plac,
in the economic world, which, in my
opinion, has been due largely to thu
paralyzing effect of an unknown repa
ration amount. If the amount as nov
fixed proves not to be unreasonable, i:
Germany accepts it and sincerely set!
about meeting the payments and ther,
is not too much outside interference.
with her, there should be certain. i.
gradual, resumption of normal worlt
intercourse.
"The greatest obstacle to return
to normality will then be the difficulty
in meeting the great demands fo1
money and credits which renewed ac
tivity will entail. Too great emphasi.
cannot be laid on the fact that w.
must not expect a very rapid return
of the worlds economic balance. 1
will be better in the end if the re
covery shall be slow throughout it.
course. None can say whether it will
be slow or rapid in the beginning, bu
once it starts it's continuance is GER
tain"
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