Evening star., 1927-11-27
FRENCH HAIL AULD
AS KEYNES RIVAL
His Book, "The Dawes Plan
and New Economics" Ex-
pected to Stir Sensation.
BY GERVILLE REACHE


By Radio to The Star.
PARIS, November 26.--GeorGe +.
Aud, formerly accountant general OF
the Reparations Commission, and VINO
assisted Owen ID. Young in installing
the Dawes plan, has just published a
hook "The Dawes Plan and the New
Economics" which undoubtedly VIII
create a sensation both in Europe anu
in the United States.
When the French edition appears II
will certainly be received with deep
satisfaction. The author, indeed, IN
scattered articles. already has shown
himself a redoubtahle opponent OF
aohn MAYNARD Keynes theories, which
does not diSpleaSe French readers
Mr.. KEYNES thus far always mas
escaped his contradictors-someti
in devious ways-but this time he VIII
not get away so easily.
Mr.. Auld's book confirms the thesis
this correspondent has set forth Ire
ouentlv-"the United States enters the
arena of world politics with no policy.
but is learning fast. and what Eu.
rope has done in the past the United
States can do today.
Keynes Theories Held False.
Mr. Auld holds. that Mr.. Keynes
theories. especially concerning the inn
possibility of paying war debts and
reparations, are obscure and false.
He shows that pre-war Europe was
owed by the world far more than 1t
now owes America. AS for the risks
in new American investments, he calls
them ordinary commercial risks.
MIR. Aud marshals actual facts of
the last three years TO prove Mr..
KEYNES predictions unsound. lie also
demonstrates the falsity of certain OF
Mr.. Keynes premises, such as the
statement that France does not pay
taxes. He shows that economists
have been too far ahead of the facts
and have underestimated the extent
and duration of Europe's war desola-
tion and the tremendous part Amer
ica's unparalleled prosperity might
play in reha biltating ruined world.
Mr.. Auld's facts are accurate and
lead him TO sound, realistic conciu-
sions. which it is impossible to praise
too highly. However. certain reser-
vations must be made.
In the first place, it is regrettable
that the Dawes plan was influenced
by the theories of English economists,
and Germany thereby was permitted
clauses, although Washington always
has refused to insert equivalent condi.
tions in the allied debt settlements.
1t is true that a nation can always
transfer, if not with national revenue,
then with capital. In the past trans
fers were simplified by cessions of ter
ritory. Today they are possible by
foreign participation in business, as
was done in the case of the German
railways.
Estimate Not Accepted.
Moreover, Mr.. Auld'S estimate of
the Dawes plan is not accepted in
Paris. The committee of experts def
initely declared it was not within
their competence TO fix the number Of
annuities which Germany will have
to pay, as this would practically mean
fixation of a new German capital
debt" Indeed. it would shock the
European sense of justice if the allied
debt payments were extended g.
years while the German payments
lasted only 25 years at the full rate
and Is years at half rate.
War debts, explains Mr.. Aud, are
debts between taxpayers, and the al
lied taxpayers, if obliged to continue
heavy annuities under the Mellon
agreements, will doubtless agree ~
years hence that the German pay
ments should continue at least 62
years.
Meanwhile much water will pass
under the bridge, and perhaps the
idea of general compensation Of debts
will make progress. Anyhow, every
day shows evolutions in these prob.
lens which confound the economists:
DR.. Hjalmar Schacht. president of
the German Reichsbank, in a speech
at Bochum, declared that since the
Dawes plan went into effect German
states and cities had borrowed about
two and a half billion dollars.
Another Interesting Fact.
Germany, indeed could have
great part of her railway first mort
gage bonds if she had desired. and
thus discharged a considerable part
Of her capital debt. Such things will
be still easier as soon as European
money rates decline. Who could
have foreseen such developments
three years ago?
Another interesting fact is the re-
cent conversion in New York of
s400, 900, 900 in and 4i4 per cent
Liberty bonds into 3i2 per cent notes
(which melted Philip Snowden to ask
the British chancellor of the eX-
chequer in the House of Commons
how it happened that Great Britain
had consolidated its American debt
at 3Ia per cent The chancellor
automatically replied that he saw
no connection between the two facts,
but the British taxpayers did not
miss the point.
lCopyright. 1877