The New York herald., 1921-12-16
FRIDAY. DECEMBER 1s, 1921.
Germany's Reparations Default.

Germany's Reparations Default.
Germany's notice to the Repara-
tions Commission that she cannot
meet her January and February pay
ments will not be surprise to the
Allies. 1t is on this very subject that
LLOYD GEORGE and BRIAND arranged
several days ago to have confer
ence Monday in London. These prac-
tical statesmen may have different
opinions as to the best way to tide
Germany over to a more favorable
day and situation for paying the
500,000,000 gold marks due on Janu-
airy Is and another payment due in
February. They must be in accord,
however. on the homely axiom that
you cannot get blood out of stone
and that if Germany cannot pay now
she cannot.
The paper mark has fallen so low
recently that it has been of very little
nse in raising the gold which is re-
quired by the reparations agreement
for the payments. So Germany asks
for an extension until she can obtain
the necessary gold either through an
Improvement in the value of the de-
based paper mark or some loan to be
arranged on basis of commodities
and other property for security.
What the Allies can do with the
heavily indebted and hard pressed
German Government is just what a
private creditor does with private
debtor who cannot pay on time. They
can give the German Government the
requested extension. meanwhile doing
whatever else they think is good bust
ness to enable the helpless debtor to
get into better position for pay
ment, or they can in effect throw the
debtor into bankruptcy.
But forcing Germany into the
hands of receivers for the benefit of
the allied creditors might be even
less productive of immediate gold
than letting the Germans work out
their own payments as best they can.
The German Government as such has
virtually no convertible property or
other material assets which could
be easily turned over to the credi-
tors. What Germany pays through
whatever process must come from
German industry and the German
public, and the German Government
in the very nature of things could
get more and get ii with less friction
from those sources than a foreign
receivers commission could, so long
as taxes within Germany must be
Welded in the form of printing press
marks and such printing press marks
ere not worth much of anything in
cold.
Various schemes have been pro-
posed by the German National Manu-
facturers Association for sharing the
August they volunteered putting up
their combined works and assets as
basis for foreign loan of a billion
and a half gold marks to meet rep
arations payments. AS they saw it,
this loan and payment would con-
vince the Allies of Germany's good
intentions to meet reparations obliga-
tions as far as possible, and would
provide time to find better methods
TO make subsequent payments.
Although this original scheme has
not been adopted, two others are un-
der discussion, either one of which
would utilize the collaboration Of Ger
man industry to the fullest extent.
Farming out all taxes through a
sort Of taxation syndicate of German
Industries horizontally combined is
the present proposal of German man
ufacturers, made at the National Eco
nomic Council. In common accord
with them, the Government would fix
the total amount of taxation and then
leave them free to distribute and to
collect IL among their agents.
That this method would put the
financial control of the Government
entirely in the hands of big indus.
try is the main objection Of Germans
who jealousy guard State soyer.
eighty. They, with the approval Of
Premier WIRTH, have prepared an
other bill which would do just the
reverse and put the total assets of
German industry at the disposal of
the Government as basis for rails
ing foreign loans. Whichever of the
two schemes is finally adopted is Of
secondary Importance to the fact that
German manufacturers have demon
ssratcd their intention of vigorously
supporting the Government in an