The New York herald., 1922-10-05

BILE surplus. The taxes would De palu IN
marks, and whether the marks are de-
rived from avowed taxation or from con-
cealed taxation through the use OF the
printing press. they are in neither case
a currency which would be accepted In
discharge of foreign liability.
I"In the actual condition OF Germany
foreign sale Of marks is an inevitaoie
accompaniment of the payment of rep
arations. Except by such sale there
does not appear to be any practicable
method for the Government to obtain
the necessary foreign currency other
than by exacting 1t from exporters as
condition of their receiving an export
license. But the exporter. who often
has external obligations of his own to
meet, does not want marks but dollars
or pounds sterling, as the case may be-
and forthwith sells-the marks paid him
by the Government for the currency he
needs. If we add to this regular sale
In the course Of business. the further
sale by Germans who mistrust the
stability Of their own currency we nave
sufficient explanation of the stupend-
GUS drop in the value of German money.
LET me come back to the question
of what Germany can pay. certainly
she can pay something, though not In
the form or under the conditions 1t is
now sought to impose upon her. Many
Germans possess foreign assets. whether
investments or balances in foreign
banks, and IL would be perfectly pract-
icable proceeding for them to sell these
assets to. the German Government. who
In turn could hand them over to the
Reparation Commission. But II is an
essential condition of such transaction
that the owners of the foreign assets
should be willing to sell them; no gov
ernment In the present situation OF Ger
many could force a compulsory sale,
"How then could this consent be OBJ
tanned? l have no doubt that II these
assets could be sold for an assured
profit the holders would be willing to
dispose of them. 1t must be remem-
bered that to q considerable extent
they are the proceeds Of sales of marks
which have been flung by Germans on
the foreign market under the well
founded apprehension that the pres
sure of reparation payments would
rapidly depreciate their value. Relieve
this pressure and the mark would inn
mediately improve. 1t has still a far
greater value in Germany than 1t has
outside, and the German holders OF
foreign assets would have clear ad-
vantage I'm selling them for marks to
their Government.
Before l leave this part or my SUBJ
Ject there is one observation I should
like to make. have no wish to mini
mize the just claims of the Allies
against Germany, and I recognize the
serious political difficulties which stand
in the way of their abatement But no
| solution of the reparation is possible
unless political considerations are subor-
dinated to economic facts. What Ger
many can pay may not be a simple
question, but it is question capable OF
being answered. Unfortunately the
answer runs counter to popular hopes,
popular passions, and more formidable
| still, a popular sense OF natural justice
which prescribes that the defeated
enemy who planned the war should
make good the lamage suffered by the
| victors. And so no authoritative answer
is given while Europe slides into ruin.
II have dealt at length with the repa-
ration problem in an endeavor to show
tlsot a nation, except in so far - it has
an exportable surplus, can only pay for
| eign debt out Of the wealth II has accu-
mulated outside Its own country. If we
pass now to the other international debts
we have to recognize that the general
argument is equally applicable to them
all. Have the debtors an exportable sur
| plus and what are their foreign assets
| With regard to the latter question the
only debtor possessing any large accu-
mutation of such assets is England.
IL As.l. H.