The New York herald., 1922-02-08

the conference as likely TO be success
lul in the economic sense only as issues
aftecting the rehabilitation OF Russia,
Germany, Austria and southeastern
Europe generally can be disposed OF. is
that the plan which may be adopted Is
not very likely to succeed on account
OF the natural limitations 10 which IL
would be subject.
somewhat the same position is taken
as regards the suggestion that no ref
erence be made at the Genoa conference
TO the question of German reparations.
Within the last month or more it
has been contended more positively than
ever before that the reparations prob
lem is an almost inevitable element in
any discussion which aims TO develop
a general solution for European ques-
tions at large.
The review then turns to the repara-
tions situation and calls attention 10 the
unsatisfactory position in which the
Preparations question has been left The
review considers the question whether
the best way of settling with France
during the next few years may not be
an extension of the plan provided in the
Wiesbaden agreement. AS to this it re-
marks:
1t seems to be more and more adj
nitted that the best way of paying
France in the next few years will be by
an extension OF the method provided in
the Weisbaden agreement. although the
use of German labor in the devastated
regions. which was contemplated in that
agreement. may not prove TO be practt-
cable. Payments I'm kind will not. how
ever. ultimately relieve the French sit
uation. because of the large French
public debt
Q<.n. Il - h nI.a 1.f.h
have occurred since the Brussels con-
ference, the review calls attention to
thel fact that at the time of the Brussels
conference business depression had not
begun to develop to any considerable
extent. II then says:
''fSince that time however, the de-
moralizing effect of the conditions in
eastern Europe has reacted very direct
~ upon trade elsewhere. with the re-
suit that recently there have been sew
eral proposals looking to the rehabilita-
tion of the purchasing power or buying
capacity of Russia, Poland, Austria, &C. >
Proposal Accepted at Cannes.
The proposal which appears co have
been officially accepted by the Supreme
Council at Cannes provides for the in
corporation of an International organ
ization based upon private capital. the
participants to include representatives
Of Great Britain, France. Italy, Bel
gium. United States, Germany and pos
sibly others if they so desire The de.
clared purpose of this organization is
the rebuilding of railroads and other
means OF communication in Russia and
the plan contemplates the creation not
only of a central international corpora
ton with headquarters in London but
of afiliated corporations in the partici-
patlng countries a well. Contributions
70 the capitalization of the corpora tion
arqFto be made in the currencies Of the
several contributing countries but con-
troll is to be exercised by the central
organization.
''Thc recent developments in connec-
ton with the Ter Meulen scheme are
outlined and contrast is drawn be-
tween that plan and the recommends
tions laid before Parliament by Mr.
Lloyd George after the close of thu
Cannes conference.
The review then comments upon the
savings to result from naval limitatio
't'The savings which will result from
thes limitation in armaments decided
upon at the Washington conference
wilk unfortunately. affect immediately
only the three countries whose finances
aret already in relatively sound condi-
tio4
what America Will Save.
",.Tt is estimated that the reduction
decided upon for the United States will
save about 5000. 300 900 on the present
building program. The saving in Eng.
land and Japan win reach an amount
approximately equivalent. In France
and Italy, however. no increases in
4
plated In the near future and the saw
ings brought about at Washington will
not affect their immediate problems.
1T Is particularly important in the
present situation not only that govern
mental budgets should be balanced, so
that short time borrowing by the Cow
crnment may be discontinued, but also
that the sum Of Government exnendi-
lures should be decreased in order to
reduce the tax burden of the business
community. In most countri as. how
ever, eurtailment of taxeS seen's high
~ problema tical at present. Only In
the United States has it been attempted
Any savings which result in Eng
land next year from a decrease In ex-
penditures will probably have to be APP
piled to debt reduction. The situation
Is much the same in France.
In Italy the difficulty of increasing
Government revenue to meet expendi-
turD Is almost as great. In Germany
tho balancing of the budget is compli-
cst'd by the fuctuating value of the
n ark, and large increases IN taxes are
planned for the coming year
Gold Standard and Exchange.
Turning to the actual question of
work at Genoa the review states that a
fundamental issue to be dealt with there
viii undoubtedly be the restoration of
the gold standard or some plan for the
stabilization OF foreign exchange. Dis
clssing the latter question. the review
saws:
"From the preliminary nounce-
ments of unofficial character, as we'll az
from the agenda. IL is clear that dis.
cussion at Genoa is likely to relate in
no small measure to the restoration OF
the gold standard. or. in lieu thereof,
TO the development of some plan FOR
che sterilization of foreign exchange.
Much difference of opinion exists az tc
the means to be employed and the Incl
dental difficulties likely 10 be encoun-
tered IN bringing about a return to the
gold standard in Europe. But there
s. graft ng unanimity OF opinion
among lc9iirg economists financiers
and statesmen 20 the effect that any
permanent rehabilitation of credit and
currency systems viii nccessitate a re-
turn 10 q gold basis of some sort. II
is quite obvious however. that prior "a
any attempt to reinstate the gold stand
ard many complex problems will hav
tc be solved.
.r!i.=ea are the nroh'nnas conpactad