New-York tribune., 1922-05-30
Reply Regarded in Paris
as Assuring Settlement
of Reparation Prob
lem for Current Year
Ready to Pay Full
War Debt for 1922,
Germans Plainly Optimis.
tic of Loan, but Sug-
gest Issue of More Pa
per as an Alternative
Rn Cnhfc to The Trihnne

PARIS, May 29.-Germany's re-
ply to the ultimatum sent by the
Reparation Commission on March
81 setting forth the terms upon
which moratorium Of the 1922 war
bill installments would be acceptable
was received in Paris to-day and is
said to assure settlement of the
reparation problem for the cur
rent year.
The text of Berlin's reply will be
issued tomorrow, the commission
announced tonight after four hour
session, in which the document was
analyzed in order to determine
whether it would be found acceptable
as basis Of settlement.
1t is understood that Germany ac-
cepts all the conditions for Allied
supervision and control as set down
in the March ultimatum. This
means that the Allied committee as
signed to the task will have head
quarters in Berlin, and will be per-
mitted to inspect the books of the
government departments
Terms of Settlement Indicated
The Tribune correspondent learned
that the reply permits q settlement on
the following basis: Germany will
pay all the reparation due in the cur
rent year in goods and through the
medium Of internal taxes. The equi-
librium of the budget will be main
tanned through forced loans, which will
carry on the internal business of the
country.
In addition to paying 1,45o.ooo. 900
marks in goods. Germany is called
upon to pay 720.o00,o0o gold marks
The new settlement takes into account
the possibility of an international loan
which the bankers are now consider
ing in Paris. In the event the loan
is successful Germany will be allowed
the least amount equivalent to her
obligations in gold which she will turn
over to the Allies, thereby relieving
the government of accounting for this
payment in her budget. If the loan
Commission will allow Germany to
make a new issue of paper money suffi-
cient to cover the gold payments due
less the sum paid since April l.
Germany already has wiped off about
350,000,000 gold marks, leaving 370.-
100000 due This when translated
into paper marks, means about
22,000000, 600.
Claims Assurance From Morgan
It was plain tonight that the Ger
man answer is based on extremely high
hopes that the pending international
loan will be on favorable terms. as
otherwise it is regarded as unlikely
that Berlin would submit to the stern
program laid down by her former enc
mics. 1t will be recalled that Finance
Minister Rathenau, while at Genoa.
permitted it to be known that he
had beer in touch with j. P. Morgan
and received from the American banker
the conditions of the loan to Ger
many would be favorable
With the new turn here to-day many
financial experts believe that the
terms of the loan may be even more
favorable than expected If this proves
true the bankers may begin business
like sessions, which were impossible
while the German reply to the Repara-
ton Commission was not known.
Germany's reply was received by a
full meeting of the Reparation Com
mission and Immediately the members
began to compare it paragraph by par
agraph with the conditions OF the note
sent by the commission on March 81.
I One erroneous impression was dis
| sipated after the first reading. The
! German newspapers had announced
| that the acceptance was contingent
upon the success of the international
loan. The commi found no such
reservation in the answer.
Budget Agreement Hazy
Two points in the German reply are
said to have given the commission
much concern. The first was the pledge
made by. the government to re-estab-
lish the equilibrium of the budget by
internal loans. This promise is some
what befogged by modifying pledge
/! The question is whether this is suffi
cient in view of the fat demand made
by the commission
The second point seems to be the
misinterpretation the Berlin Cabinet
has made of the method of control rs.
quired in the note regarding German
finances. 1t was clear in the note
sent to Germany that the commission
was prepared greatly to widen the
functions and supervisory powers of the
committee on guarantees in order tha,
this organization might be prepared
to act as sort Of Inspector inside the
various government departments O.
Germany. This committee was created
by the London agreement in May, 1921
but has not functioned, having beer
content to ACCEPT such information n,
Berlin desired to hand out. Germany
however, has sought in her answer e
pass over this matter of supervision b,
referring to note written by Glenn
enceau at the instance of Presiden
Wilson, promising that no Allied su
pervision of character to offend tn,
dignity and authority of the Germa,
government would be carried out.
j What steps the commission will tax,
on these two points may not be know,
for many days. 1t was pointed out to
night that it is not Incumbent upo,
. the commission to reply immediately
If it finds anything that is embarrass