The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-04-09


volved In that event an adjustment
of treaty obligations over a period
OF years is obviously the only
course possible. The amount that
can safely be fixed for reparation
purposes tends therefore to be the
difference between maximum rev.
enue and minimum expenditure for
Germany'S own needs.
Our scheme needs both foreign
and internal subscriptions to the
bank of issue, and, in particular, an
external loan as an essential con-
dltlon enabling and assuring repara-
ton payments.
We fully recognize both the
necessity and the justice of main
tanning the principle embodied in
the treaty, that Germany's pay
ments should increase with what
may prove to increase her future
capacity. We also recognize that
an estimate now made, once for
all, might well underestimate this
and that it is both just and prac-
ticable that the allies should share
In any increased prosperity.
Commensurate Taxation.
I'VE have done our utmost to ap.
ply the principle of commensurate
taxation. 1t is not open to dispute
as simple, principle of justice and
1t is contemplated by the treaty
that the German people should be
placed under a burden of taxation
at least as heavy as that borne bv
the peoples of allied countries.
We are of the opinion that at
least during the period within
which the loan which we propose
is being amortized the annual
charge upon Germany should NOT
be heavier than that which would
result from application of this in.
deX, nor would the COMMITTEES ar.
cept any responsibility for bal
ancing the budget even in later
years, if heavier payments than
above were called for. We nro.
pose that an average of the wears
1926, 1927, 1928, 1929, should he
taken as a base; that the ner.
centage of increase shown bv each
of six sets of representative stats.
tlcs-railway traffic, population
foreign trade, CONSUMPTION of TO-
oacco, ETC., budget expenditure and
consumption OF coal should be as
certained and the average of these
SIX percentages should be taken as
indicating the proportionate in
crease to be added to the treaty
sums demanded.
In a given future year, under
this system, Germany will retain an
incentive to develop as she retains
the major part Of the advantage of
any increase In prosperity, while
the Ailles OBTAIN reasonable share
OF this increase and avoid risk OF
losing through premature estimate
OF Germanys future capacity. At
the same time fhe adoption of, a
method involving not discretionary.
but automatic application, gives the
necessary assurance from it's com.
mencement, both to Germany and
the world that the Versailles treaty
demands Will not, in the period to
which the settlement relates, be
again subject to negotiation or dis.
pute.
Further Corrective.
I'VE propose, however, one fur.
Their correcting factor Of quite q
different character which is only
precautionary measure and NAV
never actually be involved. The
treaty prescribes Germany's obliga.
tions in terms of gold and for con.
venience we have expressed our ca.
innate in same terms.
We propose that any reduction
or increase Of the figures both as
regards the standard and the sun.
Elementary payments, should be
made automatically in correspon.
dence with the changes in the gen.
eral purchasing power of gold,
whenever by the decision Of i'm,