The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1924-09-04

udb Dccu pOlutcQ Out ny Allyn AD-
bolt, professor Of economics at Har-
ward university, the task referred
to the Dawes commission was not
that of solving the reputation prob
lem but the specific task of CON
sidering means of balancing the bud
get and measures to be undertaken
to stabilize the currency" With this
clearer insight into the subjects to
be accomplished by the commission
a better understanding of the plan
it submitted and which has now been
accepted by all concerned, may be
realized
Examination of the plan shows
consideration of the reparation
problem has been only as a means to
an end and that it contemplates the
rehabilitation of German finances
and the balancing of her budget with
the view of securing the payment of
those reparations And to do this
1t was necessary to fix or limit the
amount of the maximum annual
payments in order that a budget
might be balanced.
Stated in its briefest form then,
the Dawes plan purpose is to pro-
vide for the payment of PREPARATIONS
already fixed through the agency of
a stabilized currency and a balanc-
ed budget. This plan is to be ac-
complished through cooperation of
the Allies and Germany and is based
upon mutual interests. AS a first
4, condition it provides for an inter-
national loan of 8O0,0O0,0O0 gold
marks or $2OO,000,00O in American
money. This loan is for the pur-
pose of establishing new bank of
issue for Germany, to aid in stabil-
izing the currency and to pay the
| first year reparation installment.
Incidentally, with the establish
ment of this bank of issues, the un-
restricted issuance of currency in
Germany is stopped. With the ex-
ceptiOn, to limited extent, of the
Banks of Baden, Saxony and Wur-
temburg, the bank of issue is to have
exclusive right to issue and circu-
late bank notes in Germany during
the period of it's charter which is for
fifty years. The government is not
to issue any coins for circulation ex-
cept gold coins containing approx
mately full value in gold metal. All
coins other than gold are to be is
sued by the new bank of issue.
Neither has the German government
or any German State bank any right
to issue paper money under the
Dawes plan. The new bank of is
sue is to be free from government
control and will be administered by
a German managing board but SUI
pervised in all matters affecting Gre
ditor nations by general board of |
seven Germans and seven foreign !
ers.
All PREPARATIONS are to be made |
ha nh ~f \
sources of these payments as pro-
vided under the Dawes plan are:
The 100000, from which a part |
of the first years payment will be
taken; a mortgage on German rail-
ways; mortgage on German indus
tries; transport tax and revenues
from the general budget, guaranteed |
by certain controlled revenues"
The experts estimate the plan will
produce for reparation payments
1000, 100000 marks the first year.
l,22O,0 100000 marks the second year
and by gradual increase reach
1850, 100000 the fifth year, which
Is to be the maximum annual pay
ment to be required of Germany.
Thereafter the payments are to be
fixed on sliding scale and subject
to addition or reduction under ex-
listing conditions. Revenues from
customs, alcohol, tobacco, beer and
sugar are to be assigned and put
under control of Germany's credit
ors and are to guarantee the repara-
ton payments after the year 1926
1926.
Provision Is also made in regard
TO the transfer of payments out of
the country with a view to protect
ing against unsettling the foreign
exchanges but these safeguards are
largely of technical nature.
This in a brief way summarizes
the scope OF the Dawes plan and out
lines its purposes. 1t is true that
many other provisions are made as
Tor instance the requirement that :
Iermany's taxes shall be as heavy =
Is those of any of her creditor ma
ions. But such provisions have
'nly to do with details in putting
nto operation the actual working of
he plan.
What its effect will be is still in
he realm of speculative hope. 1t
not claimed by its sponsors to Of
er sure and easy progress to finan-
1al recovery but merely provides an
greement upon systematic pro-
ram of continuing efforts. 1t is
onceded that difficulties may be ex-
ected to be encountered at every
tep. Politicians will be watchful
0 take advantage of every failure
the execution of the plan to serve
heir selfish ambitions and personal
ain. Control will become irksome
the German people and her more
xtreme nationalists will find OPP
ortunfty to endeavor to arouse the
eople and to capitalize popular dis
ontent.
The effect of German monetary
ability upon the trade of the Unit
! States cannot be other than ben
licial. Germany has always bought
lore from this country than we
ave from her. The withdrawal of
erman balances and investments in
lie United States, our own invest
6ntS In q