Evening star., 1921-12-04
BY OLIVER OWEN KUHN.

X problem since the. Versailles
treaty was signed. With COM
pIete financial breakdown
threatened throughout the length and
the breadth of the continent, and the
moment having arrived when there
should be complete cooperation and
lack of friction between the allied
governments, there is on the other
hand pickering, squabbling and the
tanning of flames that are as certain
to- bring about new alignments and
new readjustments politically. as well
as economically, as the sun rises and
sets. The solution of the riddle lies
In united cooperative endeavors in
solving the German financial problem
which is so intermixed with the pay
ment of allied reparations.
Germany may or may not have ex-
hausted every avenue in preparing to
raise the S250,O00,000 dollars due in
reparations in January and Febru-
ary But the fact remains. Germany
SAWS that she cannot pay without
bankrupting the German state. To
pay in gold is utterly impossible. TO
pay at all Germany must flood the
world with exports produced at
smaller cost than they can be pro-
duced in any section of the world to
which she sells. Germany must pay
her obligations out of future produc-
ton. not present tangible assets. If
Germany floods the markets of the
world with goods produced at low
cost then other nations cannot begin
to compete and there undoubtedly
will follow stagnation of business and
consequent engulfing of Europe with
unemployment with it's myriad con-
esquent dangers. For. it must be
borne in mind. other nations also must
pay obligations with future trade
also.
If Germany does not pay, then she
lays herself open to seizure by the al
lies, until satisfaction is obtained
This is provided for in the treaty of
Versailles. but it is the last thing
the majority of the allies desire.
x = x x
How to save Germany and make
her a going concern financially ana
preventing allied action which might
lead to future wars, is the thing that
is giving London considerable worry.
British prosperity is in large mea-
sure dependent upon going Ger
many. Correction of Frances precarl-
Gus financial position likewise is in
a measure dependent upon fulfillment
of Germanic obligations and France
is ready to resort to any eXpedlency
to collect every farthing provided for
under the treaty. The friction that has
developed between these two coun-
tries in the months that have elapsed
since the reparations question first
became acute is not conducive to
reconciling the Franco-British view
points-the first to exercise sanctions,
the second to avoid them.
During the past ten days Hugo
SHINES, the great industrial magnate
of Germany, and DIR. Walter Rathe-
nau, German financial expert. have
been in consultation with British gov
ernment officials in regard to methods
through which Germany may be able
to pay. 1t is known that the question
of a moratorium for Germany has
been discussed. Likewise great Brit
ish financial interests have been ap-
preached in connection with the ques-
tion of advancing Germany a long
time loan by which she may meet the
reparations payments due in January
and February. AS to loans there are
exceedingly small chances of them be-
ing realized unless the allies can
frame some system whereby the con-
tinued flooding of Germany with
paper marks is stopped and some
definite plan established whereby the
financial situation of Germany is made
less precarious.
In the moratorium certain sections
Of the British people see a chance for
the stabilization of the mark, pos
sibly its recovery to a point where
1t will be possible for the governm ent
to revise it's financial affairs to a
point that future reparations pay
ments will take care of themselves.
Most certainly it is true, if Germany
continues to avoid allied sanctions
embracing control of her financial
affairs by other nations, she must
have time in order to revise her whole
collective system.
Germany's protestations that she is
able to pay only a small proportion of
the reparationS payment due in the
next three months. The Germans, on
the other hand, have pointed out to the
British that in all probability the Ger =,
man government deficit will be more
than 10000, ,O0000 paper marks for the
rAxt fiscal year, not accounting for the
reparations payments and compliance
with other allied sanctions. which may
bring the total up to around 300, ,000, ,000,-
600 paper marks.
X X X X
The French. it is reported, will de-
nland that Germany be declared bank i
rupt and that the ,Rhineland regions be
made autonomous. under control of the
allied powers. This is step that will
be bitterly opposed by the British. 1t
is declared that the suggestion that the
allies and Germany unite in the eX-
ploitation and revival of trade with
Russia to reopen that great reservoir of