Evening star., 1926-01-10
EFFORT TO FORCE PAYING
OF WAR DEBTS HELD FUTILE
Both Allied Endeavor to Collect Repara-
lions and u. S. to Have Loans
Repaid Declared Useless.

past war chapters, but simply 10 the
present value OF getting rid of an
noyanceS and interferences with her
complete economic liberty, annoy
arces inherent in the Dawes plan.
Meantime, TO extract a promise from
Germany 10 pay anything her con
querers have had to lend her money IL
vast amounts
There is another aspect. We are
all Of us, Britain and the United
States in particular, lending largo
sums to German industry and thus
becoming particlpatOrS in this III
dustry. We are thus becoming inter
ested in its success and concerned
with the prevention Of anything which
might affect Il. And so we are con-
cerned not with the dead horse" Of
old war debts. but with the living issue
Of postwar loans
Thus Germany has substantially
won clear from reparatiOns. She mas
not paid them since the war: she is
not paying much on account Of the
Dawes plan yet, and she Is taking In
huge sums in the form Of loans We,
her cOrquerors. have failed totally IN
our effort TO make her pay for the
war. beyond the value o. her quick
assets which we seized Immediately
after the war. We have financed
and are financing her recovery; we
have accepted the principle that re
CoTerE must not he checked even by
any reparations obligations. All that
remains iS the final agreement OF
Germany TO buy in at the nuisance
value the reparations obhgation-to
buy it III not al our price but at hers.
Germany l. Far Ahead.
on balance between January, 1920.
and the recent new wear Germany is
ahead and far ahead, 50 far az the
account with her conduarOrs is con
cerned- It is true that her resistance
notably in the Ruhr, has had terribly
severe consequences for her. resulted
in the prOstration Of her industry and
| enormously retarded her recovery.
| But having made the resistance, she
has been able 10 saddle upon her rivals
the task Of financing her recovery il
the end. Meantime the little she has
paid in reparatious has been more
than covered tor the whole period by
what she has received in loans. TO.
gether with 'he proceeds Of the in
tiation operations.
II IS customary 10 say in Europe,
as d consequence, that Germany has
won The peace This is a rather ali
Surd statement, because il rests upon
the assumption that some other policy
might have mad her pay more. The
truth Il that il Was never possible to
/ make Germany pay more than she
/ had q reason Tor paying once her
/ liquid assets hau been seized. Their,
I was no power which could coerce.
! Power there was, but its applica ton
/ only led TO the immediate passive re
! siSta nee Of a nation which chose do
mesJic paralysis rather than foreign
| tribute.
Attempting Impossible.
Il was not that the Germans defeat
| ed their CouGuerurS by supreme skill.
il was that their conGuerors defeated
themselves hy attempting the in
! possible E.naea vurin4 tu collect hE
coercion they discovered that not
! only were they not collecting repara
/ tions, but they were losing the very
| large value To them Of the German
market and running the risk to them
| selves Of some new German domestic
| political explosion following domestic
chaos and suffering.
Some time. before very long-posSi-
| bly, in the new year-Germany anu
| her ConQuerors will again sit down
at table to discuss the liquidation OF
/ the whole reparationS account. Ger
! many desires 70 get her territoTZ
/ eNd,Hl;it.'I. To recover hey SOEereIElt.
! in the >aaJ Ra~II., to free herself o.
/ many GiS;i erceatle restrictions upuI
/ her complete Freedom. ILtSt nave "a
! value TO her and she IS certainly Will
| Ing TO pay something Tor them. bUr
only her price. Moreover. France, for
! example, needs an economic treaty
with Germany to cover her iron and
| her AlSatian textile production, So
| that she will have 70 pay on her side,
| too.
But it is a safe prediction that when
| this discussion opens there will be no
y ,f- -F "a
| threats of coerCions and sanctions.
| The conference will he a business
! transaction, the result will be arrived
at by negotiation and Germany will
not offer nor be forced TO offer more
! than she is willing TO pay, because, IL
| the last analysis, she cannot be mad,
| TO pay.
Six Years Teach Theory.
! Six years OF experience have demon
strated that apart from liquid assets,
which can be seized physically, the
! conquerors cannot exact from the con
| quered any continuing tribute in eX-
| cess of what the conquered nation
| feels it is profitable to itself TO pay TO
| get rid of unpleasant consequences OF
| defeat. Measured by what was ex-
| pected at Paris seven years ago, the
| world knows now there VIII be no
| German reparatious. The expected
! billions are gone, now, past all nope
| of realiza ton; even the millions which
| are possible still are relatively meager
| and will be paid only if Germany be-
| lieVeS payment worth while. AS be
| tween allies, Britain Will not accept q
| share of French claims upon German
| reparationS as payment for French
debts to Britain. There is 3 final in
! dication of the real value attached TO
| the reparationS claims.
| Unhappily. the delusion as to inter
! allied debts has been even more diff
cult to explode than that as to repara-
tions. The great majority of people
in the United States still believe, for
example, that we are going to get
| back large portions of the amounts
we loaned to the allies during the war.
! Congress, expressing this belief. acts
on the assumption that it can regulate
the agreements to pay of the debtor
nations and, by rejecting the terms
already made. get better.
Loans Exceed Payments.
Now in point of fact, taking the
same period of time as in the case of
the German reparations-tha is, from
January l. 1920, onward-What has
{ been the fact? We have made sew
eral debt settlements. all of them on
the basis of material reductions. We
| have received, notably In the case OF
the British, relatively considerable
/ sums on account. But on balance we
have loaned vastly larger sums than
we have recouped. Those nations
which have so far paid US money
have, save for the British, done no
more than turn over to our Treasury
a certain small percentage Of the
money they have borrowed in our
markets. Volpi. for instance, who
negotiated the Italian settlement, got
a loan of 500, 100000 in Wall Street