The Washington herald., 1922-07-23

has brought ! situation which
from the British standpoint can not
be permitted to endure. There
| must be action and the f1rst step
lin this action must be q reduction
of the sum total of reparations
which Germany Is required to pay.
But to bring this about the Brit
| ish will have. In substance, to con-
sent to the reduction OF their own
claims for participation In Ger
man payments. based upon the in
clusion of pensions. In a word,
experience has demonstrated that
America was right and Britain
wrong at Paris and that the maxi
mum of possible payment by Ger
many will not pass the sum neces-
sary to reconstruct devastated area.
Must DefIate sum.
The British. then. having inflated
will have to deflate the sum of
reparations. They will have also
to cancel the loans they have made
| to their allies of the war. Defla-
ton will consist in che cancellation
of the British % per cent claim
upon reparations and the, reduc-
| tion of the sum Of reparatfons by
the further amounts represented by
allied debts to Britain. In my
Judgment these steps will now have
to be taken without waiting any
longer for American. action.
The. burden of all this process
| will be placed upon British shoul-
ders. but quite properly. because
Lloyd George is responsible for the
original initiation of British claims;
moreover the burden is more ap-
Britain can not afford to accept
payment in goods from any of her
debtors, since this means the ex-
pansion of domestic unemploy-
ment-and goods represent the sole
method of payment.
As to the situation which re-
mains, Germany will have her OBJ
legations reduced by $4,000. 900, 900
by the cancellation of British and
Italian claims upon reparations,
that of the Italians resulting from
the cancellation of the Italian debt
to Great Britain and by $4,000, ,000.-
900 as a result of the Brit sh cancel
lation of the French loan. 1t will
then stand at $4,000. .000. 900 in
round figures. which is still approx
imately twice what is regarded as
possible now.
Reduction Possible.
At this point 1t will be possible,
however for Britain to recommend
reduction of the sum total. hav-
ing herself taken the steps which
| are obviously required. To reduce
the sum by approximately half will
be necessary before there can be
| any international loan. Here. of
course, the question of French debts
of this debt would obviously remove
the last obstacle to French consent
to a reduction Of the remaining to-
tai figures which would represent
the possible.
| We are, however, a long way from
such a step. Today we have first to
| get rid off the consequences Of the
imitation of the reparations due TO
the inclusion of pensions which was
itself a consequence of British pol
icy dictated by Lloyd Georges rash
campaign pledges. We shall arrive
at this by the elimination of British
claims upon Germany for repara-
| tions. We have also to witness the
British consent to cancel claims
upon her allies. who will never pay
except in German securities. which,
in turn, only represent German
|
British. attended by corresponding
further reduction of the total of
German obligations under the treaty.
VIII Not sunice.
These two processes will not suf-
flee. Germany will no more UNDER
take to pay sec, ,000, 10000 than $3S,-
900, O,O00,0 900, and no international
loan could be fioated upon the basis
I'D Hf tod
ness At least $1,000, 100000 addi-
tional could be removed if America
would consent to cancel what
France, Italy and Belgium owe her,
with the understanding that such
| cancellation should promote similar
reduction of claims upon Germany.
| The only other solution is dras-
/ tic reduction in the sum total by
the European states. without regard
| to their American inde or
course the main burden OF such
| process would be placed upon
! France, which. at the completion
of the process / have sketched would
hold SIS, 900. 100000 Of the outstand-
| ing SEQ, 200, 900, 900 of German in
| debtedness, as. against sS,OOO.0oO,-
600 already expended for repara-
tions, $4,000, 100000 projected and
| $4,000. 100000 owing the United
States. To cut the French share in
half, which would be necessary to
reduce the German reparations to
the $4,000. 900, 900 now held to be
the reasonable figure, would leave
the French less in German obliga-
tions than they have already ex-
pended in reconstruction, and with
| S3.000,0 900. 900 left to pay the United
States. On the other hand, II the
international loan were issued and
| succeeded, the French would obtain
relief from most of their present
and most pressing trouble.
Has Been Paralyzed.
British action so far has been
paralyzed. not by the failure to per-
ceive the sacrifices which must be
made, but by the hope that the
United States could be persuaded to
cancel allied loans. including Brit
ish, at the same time the British
Cancelled their loans. This hope has
about expired and the situation is
getting too grave for much longer
delay Now. what is left to the
British is to cancel their foreign
claims, German and French alike, to
undertake to pay the United States
what it owes us. and then seek our
assistance, alike in cancelling our
claims upon France and Italy, thus
assuring further reduction of the
sum of German reparations.
An European adjustment lacking
our participation will be more or
| less incomplete. for both Italy and