New-York tribune., 1921-12-05
Reparations
TOBe Revised.
London Hears
ProgressM Made at Conference.
1t Is Relieved, and Coop
eratiOn Between Germany
and Britain NotImpossible
Plan of Great Importance
Lloyd George Expected to
Bare European Financial
Situation to Harding Here
From rhe Trfbune's European Bureau

7N'F'f 'nN'r '"~'f ~f'N 4oIh lEtDuDc Int
LONDON, Dec. 4--By far the most
interesting event of the last six months
was the opening of negotiations here
by British government officials which
are expected to result in radical re-
vision of the terms of German repara-
tions payments.
That such a step was inevitable
became apparent several weeks ago,
but few persons were prepared to see
the government take active measures
before the first of the new year, and
consequently considerable surprise was
expressed when it was announced that
Sir Robert Horne. Chancellor of the
ExcheQuer. had granted an interview
TO DR. Walter Rathenau. who rivals
Hugo SHINES in Importance financially
in Germany.
The first reaction TO this development
took the form of violent fluctuations
in fore gn exchange rates, marks ap
preciating even more rapidly than they
deprecated in the first week Of Novem-
ber. when the low record was made.
simultaneously, the pound sterling i'm
proved in the dollar market, reaching
the highest point of the year, and the
franc and Ira gained several points.
Although the improvement was at
trbuted largely to the effect of spect-
lation, there has been a feeling that
at last Great Britain has elected to
push her policy of rebuilding by get
ting down to bedrock. Thus far only
start has been made, but the work will
continue for long time, and it is
hoped and expected that America will
soon be cooperating fully
II would be folly to attempt to pre-
dict, but it is possible TO point out
some Of the things which may happen
now that the government has come to
the conclusion that revision of the
reparatlons terms must be adopted.
This view is shared by all prominent
British fnanciers, wh,o have been play
ing an important part in the series of
conferences during the week.
The effect of this decision on the
future of British budgets will be con-
siderable and needs no detailed expla-
nation. Apparently the authorities here
believed that in the long run Great
Britain would profit more by cooper
ating financially and economically with
Germany than by forcing her into
bankruptcy by compelling payments of
indemnities as provided under the
Treaty of Versailles.
Germany seeks British as we'll as
American capital for investment in
various German enterprises. Recently
the British Federation of Industries,
representing many concerns in this
country, devised d scheme of having all
German industries issue securities car
rying Il first charge on these enter
prises to be handled by the Allied gov
ernments ard to pass eventually into
Individual ownership
The German plan as advocated by
Herr SHINES and DR.. Rathenau has
much in common with this scheme Just
outlined. What Germany seeks pri-
marily is industrial and financial
breathing space, and apparently the
British believe it would be good policy
to give her time.
1t is clear that these schemes would
be to the advantage not only of Ger
many but also of England so far as
trade is concerned as we'll. That is
one possible development of the pres
ent negotiations.
Another is the granting Of a mora
torium, against which the chief objec-
tion is that it is merely postponing
the collapse unless fixed for long
term. Under this scheme Britain
would insist on Germany discon
tinuing to print paper money and also
that she make her budget balance BY
| increa sing taxation.
Still a third scheme was advanced.
and under it Germany would be asked
to do lot of building in this countrv
such as she has agreed to do in the
devastated area Of northern France
! under the Wiesbaden agreement. This
has obvious disadvantages at the pres
crt when one recalls the large number
OF unemployed here.
Anglo~German industrial and financial
cooperation is considered to offer un-
| limited advantages England and Ger
many soon may be working together in
Russia. Whatever the decision. it must
be preceded by conferences of politicians
or, TO be more exact, discussions be
tween the British and French govern
ments.
Premiers Lloyd George and BRAND al
the moment seem to be separated almost
as tar as the two poles, but as they are
now facing facts rather than theories
and estimates it is possible they will be
able to find satisfactory compromise
The future of France is completely
wrapped UP in the final settlement that
is made with Germany Events are
happening SO rapidly it is possible Amer
lea Will be drawn into a discussion
sooner than expected
If Mr.. Lloyd George goes to Wash
ington before Christmas. which he now
expects to do, he will lay before Presi
dent Harding the whole problem of Eu
ropean finances. An international con-
ference on this phase before spring is
considered virtually a certainty.