The New York herald., 1921-01-31
American Money Expected
to Flow Into Treasures
of Entente as Result
of Agreement.
CAN DISCOUNT BIG DEBT
Two Suggestions to Be Made
at London Confercnce-One
Involves Surrender Of
u. s. Credits.
ny LAURENCE HILLS.

ny LAURENCE HILLS.
Special Cable to THE New YORK HERALD.
Copyright, 1921, bp THE New York HERsLp.
@ New York Herald Bureau,
Paris. Jan. 30.
Not only have the Allies decided
what reparations are to be paid by
Germany and the form of that pay
ment without consulting the interests
of the United States but they have
devised a scheme so as to preclude any
treaty the United States may make
with Germany from having priority
over an engagement with Great Brit
ain, France, Belgium, Italy and Japan.
This phase was little stressed by the
French Foreign Office last night in
giving out the main features Of the
accord reached by Premier Lloyd
George and Premier BRAND. but It is
now known that Germany will be ex-
pected to promise when called to Lon
don for the February conference, to
agree not to negotiate any credits or
loans without the fullest cognizance
and approval of the Allies, thus ef-
fectively preventing the United States,
unless the Allies consent, from taking
German resources as a guaranty that
Germany will repay such credits or
loans.
German Exports Taxed.
Apart from this definite control of
Germapy's future financial relations
with the United states, the effect OF
the 12 per cent. tax on German exports
is being calculated by some experts as
bringing at least 5o0,000,000 marks
worth of American money into the
allied treasures, while the allied in
dustrics will benefit by the dumping Of
German goods in the United States.
1t is argued that the IL per cent.
tax will prevent Germany from COM
peting with American or allied pro-
ducers, but experts have shown that
even with the high cost Of living Ger
many will be able to produce goods
one-third cheaper than the rest Of tie
world once she receives raw materials.
ana t1lS gin Will sum ACofI a e14-
ance Of profit Of 20 per cent, sufficient
to compensate Germany for the vexa-
tious tax control the Allies intend to
impose.
Considerable mystification seems to
have been aroused by the decision to
let the Reparations Commission fix
Germanys liability, some understand
ing this to be for the purpose of fixing
a minimum which must be obtained
from Germany by combining the fxed
and variable annuities.
Chance for q Rebate.
1t was explained to the correspond
ent of the NEW YORK HERALD to- might.
that this is not the fact but that the
Preparations Commissions total liabil-
ity figure will be considered the maxi
mum. That is, IL the combined an
nuities and export tax payments ex7
ceed the figure set by the Reparations
Commission. Germany viii be entitled
to a rebate of the difference.
1t is admitted to-day that Germany
will be urged to discount her indebted
ness during the first five years, espe-
cially that portion covered by the fixed
annuities. For mis- purpose these two
suggestions will be presented at the
coming conference:
First, that Germany issue negotiable
securities which the Allies will try to
market. the securities themselves being
calculated on the amounts due each
nation under the percentage of distri-
button fxed at the Boulogne confer
ence.
Second. that Germany herself make
all arrangements for placing the full
amount without allied aid. the Allies
then agreeing to make substantial re-
ductions II paid the cash received in
this transfer and the credits Germany
may get from the United States.
The discounts would be calculated at
the rate of per cent. for the first two
annuities. per cent. for the succeeding
two annuitcs. and 5 per cent. on the
remaining years. which. If paid promptly,
would reduce Gcrmanys indebtedness 10
about 81 per cent of the 100. 900 100000
gold marks fixed as a bafis nt the Bou-
iognc conference.
The details of the methods by which
Germany will be expected to make pay
ment are still to be settled. always con-
tinaent upon Germanys acceptance OF the
principle, which would seem uncertain II
Beri'n's Wild protest tnst the Paris cal
cuiatlons are absurdly fantastic. as well
as beyond Germany's present or prob
ably capacity TO pay. was taken seri-
ously.
In order 10 rcduce allied bookkeeping
and facilitate the transfer of gold to