Evening star., 1924-04-09

referred to the finance section of the
league for arbitration.
Germany's railroads. estimated by
the experts to be worth 26,O00,0oUouu
gold marks with a net earning capac-
ity as high as 900. 100000 gold marks
yearly, were found to be an aVallabie
means for securing reparatlon pay
mentS and aiding German nnanceS
The experts propose blanket mort
gage of 1000. 100000 gold marks on
the entire German railroad system.
bearing per cent interest. with !
per cent sinking fund annually!
Sliding Scale Provided.
The interest and sinking fund on the
mortgage. they figure represent less
than per cent on the entire capitalized
value of $4,000, 600, 600. Full interest
will not be required during The period Of
reorganization, but the payments OF
10000. 900 marks will be asked in 1924
and 1925. increasing on a sliding scale
TO $50. .0OO.0 900 in 1927 and 1928. which
the experts think ought to become nor
NAL years.
German industry under the plan is ex-
pected to provide 5.0Ob.0OO0O0 gold
marks, represented by first mortgage
bonds bearing the same rate or interest,"
as the railroad bonds. This amount. tht
experts explain. is less than the total
debt of the industrial undertakings Ill
Germany before the war.
The interest on these bonds Will ,he
naid on a progressive scale. beginning
the second year with 2la per cent,
per cent the third year and > per cent
plus ] per cent sinking fund the fourth
year. In the event of default IN the pay
ment of the interest on the SINKING
fund or principal upon either rlllroadS
or industrial bonds provision Is made
for the recovery OF the deficiency from
the German government through the
commissioner of controlled revenue.
Estimate of Proceeds.
Summarizing the proceeds from all
the provisions in the plan for treaty
payments, the experts estimate that
they will produce l,000.OOO.ooo gold
marks the first year. 1,220, 100000 the
second year. and 1.450,O0O,0Oo the
third year, 1000. 100000 the fourth
year. and $500 O0O0 the maximum
payment to be required from Ger
many annually. the fifth year, anu
thereafter.
Reginald McKenna and his col
leagues on the second committee ma
that the Germans have SIX ana three-
quarters billion gold marks aprodu
and that all this sum represents
purchases of paper marks at dead
loss by a million of foreigners. These
estimates were made on mass OF
details and specific Information when
the experts regard as reliable. TheN
find that. in addition to these assets
abroad, there is in Germany foreign
money approximately to the amount |
of 200. 100000 gold marks. while
foreigners own in Germany property
TO the amount OF 100000, 900 gold
marks. which is subject TO special
taxation and consequently ought l"
be taken into account in an estimate
of Germany's resources
Would Prevent Exodus.
AS to how German capital abroad
may be attracted back t" Germany
the experts believe the only way is
to eliminate the causes of the exodus
that is give German money Il stable
basis of value and make it to Ger
many's interest to pay her obliga-
tions. The only Intern ediate meas
ure that promises results. in their
opinion, is to grant amnesty for a
limited time frcm the penalties i'm
POSED for the expert of capital and
to give special Inducements for sub
scrirtions to German loans in for
eign currency.
Germany needs help from abroad
to the eXtent { S0o,o00,000 gold
marks. partly l. capitalize the new
meet expenditures during the period
required for her to balance heI
budget. The experts say that eXten-
sion of this help. together with the
share the German treasury will have
iii interests on the railroad and in
dLStrial mortgag gcS. will give Ger
many an incentive to accept the plan
and carry it out.
Must Use Taxation.
The idea that surplus revenue alone
can De applied to the payment Of
Germany's foreign debts is rejected
by the experts. Payments, they de-
clare. ought to be made to her tax
able capacity. and any deficiencies in
resources from mortgages must be
made up from taxation. 1t is sim
pie principle of justice, they point
out, as contemplated in the treaty.
that the German people should be
taxed at least as heavily as peoples
of the allied countries. and the only
limitation should be that of prac-
The experts make a distinction
between the amount of money that
Germany can raise for the repara-
can be transferred to foreign coun-
tries. Currency and budget insta-
bility might result from overestimat-
ing her capacity for making pay
ments abroad. Reparations, how
ever. they contend, may properly be
included in the budget. The index of
prosperity as interpreted and applied
by the commissioner rs to be relied
upon to arrive as a proper balance
Railroads Are Improved.
The experts found that Germany
had been spending without stint on
complete installation of her railroad
system, which has been brought to
a point of efficiency unknown before
Po-eono E:a,on h.