The New York herald., 1922-08-02
BERLIN SEES NO WAY
TO PAY CIVIL DEBTS
Contracted by German Ma
tionals With Allied Citi-
zens Before 1914.
AKIN TO PREPARATIONS
Finds French Policy Both
'Peremptory and Die
tatOrial.'
PARIS READY TO ACT
Will Impose Penalties Of
Economic and Financial
Nature.
PARIS READY TO ACT

BERLIN, Aug. / ASSOCIATED Press).-
The text of the German Governments
note to France regarding payments by
Germany to the allied clearing house
on account of debts contracted by
German nationals with allied citizens
before the war is as follows:
THE agreement regarding clearing
house payments of June 10. 1921, was
not made by Germany with single
Powers, but with all the allied Gov
ernments concerned at one and the
same time. Therefore the German
Governments note of July IA was, as
is known to the French Government,
addressed simultaneously to all the
chief Powers concerned.
The German Government for this
reason cannot come to any decision as
to their future attitude before having
received answers from all the Govern
ments in question. 1t is Furthermore
impossible for them to act otherwise on
account of Frances threat made in the
form Of ar ultimatum TO take steps,
which. however, are not specified,
against Germany But even now, under
reservation further to enter into tho
matter. the German Government would
like to make the following remarks:
Clearing payments as well as pay
ments according to Article 297 tof the
treaty of Versailles) to be made by
Germany Will ultimately have to ema-
nate from the same sources as repara-
tions payments. No matter whether the
debts are owed by the Reich or by pri-
vate Germans. the necessity of provd-
ing bills OF exchange out of the national
economy as whole remain unaltered.
SO far as the influence of this opera
ton on the marks rate of exchange Ia
concerned, 1t is of no Importance
through which agency and according to
which paragraph the payments are
made. Given Germanys inability 20
bear the monthly extraction or 50,000,-
600 gold marks for reputation payments,
II would be an illusion to believe that
clearing payments of almost 10000. 900
gold marks per month could be further
provided. All such payments can be
considered only as an organic whole and
be treated according to a unified plan.
'sn-*The German request. aiming notMat
CT rtailment OF the clearing payments.
but at distribution of such payments
over a longer period. reposes on the
very principles which have caused the
German Governments request to obtain
moratorium for reparation payments,
ramely, the present exhaustion of Ger.
many's capacity for payments in foreign
exchange. as clearly expressed in the
catastrophe fall of the mark
Meanwhile. since the receipt OF your
Eycellency's note, n further fall of Ger
man exchange has occurred. reducing
the mark to LILO Of its rre-war value.
Germany makes every effort to fulfil.
her obligations arising out OF wars.
This, however. presupposes the restora-
ton to health of her national economy.
Such economic restoration. as we'll as
that of Europe as a whole. can be eff
fected only through the speedy coopera.
tion Of all the Powers concerned. The
policy of threats, however. does not
work constructively but destructively."