Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-03-02
DAWESPLAN USED
IN ITALIAN ACCORD
Senators to Show Same Eco
nomic Views Underlle
, Debt Settlement.
BY FREDERIC WILLIAM VILE.


European rehabilitation on the
basis of the Dawes Preparations pan
will figure conSpicuously in the forth
coming Senate debate on the Italian
debt settlement. Senators who sup
port the Coolidge administrations de-
mand for ratification of the settle-
ment are preparing to show that 1t
is based identically on the underlying
principles of the German PREPARATIONS
arrangement.
AS capacity to pay was the basis
upon which the Allied powers had
eventually to come to terms with
Germany, so capacity to pay" was
found to be the only logical condl-
tions under which the United States
could impose a funding settlement
upon Italy. The same principle, or
course, was at the bottom of the set
Elements made with Great Britain,
Belgium, Rumania and the smaller
countries which have funded their
debts at Washington. 1t will be the
governing idea if and when we rene
gotiate a settlement with France.
The administration expects the
analogy of the Dawes reparations
plan to be highly effective, when pro
ratification Senators point out its
laid in the first place on the fact
that Europe "milled around" over
German reparations for roundly six
Years-namely, from the armistice,
in November. 1918 until the accept
ance of the Dawes plan by the Allied
and German governments in August,
1924-before it faced the capacity to
pay" music.
Peril in Unsettled Issue.
In that interval economic and polit-
zeal chaos went from bad to worse.
Even another war and the constant
peril of a swing of bolshevism to the
west of Europe necessarily stared the
old world in it's distracted face. That
Germany itself would fall into the
ditch, dragging both former foe and
friend alike into collape with it, was
an eVer-preSent danger. The danger
persisted as long as the make-the-Ger
mans-pay-tO-th last-mark party was
able to make itself heard Meantime
nobody got reparatiOns Nobody got
them even when France went into
the Ruhr, at colossal expense, to fetch
them. Then came the Dawes plan
and saved Europe's economic and po-
liticai life.
There is another angle to the repa-
ratonS settlement that will he en-
phasiZed shortly in the United States
Senate. That is that the Dawes plan,
in effect Cancelled" nearly two-thirds
The reparations which the Versailles
Treaty PREPARATION commission in
April. 1921, decided the defeated ma
ton must pay. The so-called Lon
don schedule" then adopted imposed
upon Germany total PREPARATION bill
Of $132, 900, 100000 gold marks, to be
accounted for in series of "A "B"
and 'C' bonds The Dawes plan, pre-
pared by the Dawes committee of in.
ternational experts three years later
lin April, 1920. shaved down the origi-
nal reparatiOn assessment to some
thing like $4,000, 900 600 gold marks.
or about $1,000, 600. In other
words, the Dawes plan rebated to Ger
many, on the basis of the original
assessment, nearly &c % per cent Of
the amount she once was asked to
pay.
Capacity TO Pay Studied.
The Dawes experts-Dawes, Young
and Robinson for the United States
and a group of equally distinguished
business men and economists rep
resenting the allied powers-deter-
mined virtually from the outset that
no PREPARATIONS settlement was worth
considering that did not take Ger
many's capacity to pay" into ac-
count. Every Dawes committeeman,
American and European alike, was a
ke-Germany-pay man, but only a
make Germany pay" man on the
! basis of her demonstrated ability to
pay.
The Dawes planners had another
principal objective. That was to keep
Germany as prosperous as possible
during the reparation-payment term,
! in order that she could pay Hith-
erto-aS in the case of italy and
Americas other debtors-nothing at
1 all had been paid. The Dawes COM
mission was SO constrained to keep
| Germany capable of paying that the
plan provides for u REIMBURSEMENT of
payment conditions at the end of
five years, if experience has shown
that q change is necessary. This APP
plies especially to the problem of
transferring abroad the gold reichs-
marks which Germany has to pay
| into the Reichsbank at Berlin on
allied account.
Economic Factor Vital.
/ Overshadowing all of their calcula-
I tons the Dawes commissioners had
| in mind-as the American Debt Fund
! ing Commission had in mind with
! Italy and others-the necessity of do
/ ing all possible to maintain the gen
/ eral equilibrium in world economics
! They came to the conclusion it was
! sound business from every standpoint
/ to rebate the Germans about two
! thirds of the London schedule" OF
reparations. They had convinced
/ themselves that 100000 900 600 golC
| marks could never be collected anC
would never be paid.
| The United States bipartisan debt
! funders have convinced themselves
| in turn, that unless there is q kin
dred shaving" process with regard
to our European-owed debts nothing
| can or ever will be paid, besides
! which there is, as there was r
Europe for six years, the continuing
peril of a general economic break
| down.