, 1923-03-11
FOR SCRAPPING
THE PREPARATIONS BOARD

hlloWd IlCcS. tue FTe1Cn government
has reported expenditures approx
mating 100000 francs. That is. at
Mr.. Boyden's ratio. roughly $500, 900.
Rejecting that the claims of the other
allied Governments made a total prac-
tically three times as great as the
French claims. and that the payments
to pensioners have still years to run,
we are led to the conclusion hat IN
der this sole caption. the commission
was automatically led to the in
clusion of an amount exceeding the
ten or fifteen billion dollars given by
several American experts in the peace
conference as limiting the German
capacity to pay.
The Sum That Was Left
For Us in Reconstruction
If we assume that these easily cal
culable claims were allowed by the
commission substantially as rendered
by the claimants. we find for all true
reconstruction claims a balance of only
10000. 900. 900 gold marks (roughly
$4,000. 900. 0o0) out of the total of
1913. 900 .00o. 900 marks, fixed by the
commission in April. 1921. In this
part of their inquiry, the commission
had a wider range OF discretion than
in hat treated above. Who could
really know what it would cost to re-
construct the devastated areas in
France, Belgium and Italy? Nobody.
1t was due to the homeless populations
that the work should be M as rap
idly as possible. That would add to
its normal cost. 1t was necessary tina,
it should be largely done through
governmental agencies; hat also
would add 10 its cost as compared
with usual construction rates.
There is no solid ground for sup
posing that an American member OF
the commission could hav largely and
justly diminished the amount set in
the commissions calculations for re-
construction work.
1t must be particularly remembered
that in making the original ASSESS
ment of Germany's debt her ca
pacity to pay uas not IN question. The
commission had no right to consider
hat element Of the situation, save
as it might develop later; and even
then, it could not cancel any part OF
the Indebtedness. first established,
without consent OF the interested Gov
ernments.
an outline of the commissions action,
as determined by treaty stipulations.
I now desire to call attention to a sin
of omission which was above referred
to as having had tragic consequences.
When the commission made particular
demands upon tho German Govern
men for payments of specified sums
at specified dates 1t was their right.
and 1 think their duty, to know Just
how their demands would be met. II.
as claimed by Berlin. there was no
other way OF obtaining the required
gold payments than by the sale OF
uncovered paper currency. then the
commission. in my Judgment. should
have so notified its clients. 1t is well
known that the German Government
did resort to this fatal measure. not
only for the purpose of meeting repa-
ration demands but also for other
purposes. In doing SO they became
committed to the most dangerous OK
pedient which any government can
utilize In difficult financial situations.
Space does not permit me to give in
detail the many indirect consequences
of this fateful act. Based upon
personal contact with German bankers
and officials last year. I feel justified
In stating that practically none OF
them appreciated at that time all
of the effects that must flow from the
prostitution OF a currency system In
a highly developed Industrial country.
l am constrained to believe that the
members OF the Preparations Com
mission were themselves far too neg
lectful of this grave question. Much
more important to their clients would It
have beer to use all their vast power
to prevent the debauch which has &C.
Cured. tina to make bold gestures
of demand without advertising to the
world Just what the fulhllment of
these demands would can Even II
they had been more successful than
they were in the collection of small
fractions of the total German in
d~ebtedness, they would yet have been
responsible for passing yer in silence.
or with slight emphasis. the inevitable
effects upon the debtors future ca
pacity to pay. when he adopted cur
rency measures which were bound to
weaken him.
Perhaps the bitter lesson has at
last been learned; but certainly no
considerable payments can in any
way be extracted from Germany until
she shall nave set her face toward
sounder methods in the vital question
of giving legal tender quality to the
general currency Of the country.
If. through the hardships thai VIII
befall both parties for a time as the
consequences of the Franco-Beigian
advance into the Ruhr. 1t shall be ac-
cepted by all concerned that a radical
reform of German currency is the first
requisite for the satisfaction of allied
claims, then the Ruhr invasion shall
not have been in vain.