Evening star., 1927-11-20
DAWES PLAN STANDS ALONE
AS EUROPEAN GUARANTEE
Reparations Reduction Means Collapse
of Franc-Cerman Borrowing May
Bring Mark Down.

eign loans. The French are afraid
that there would be an immediate col.
lision between the allied governments,
seeking TO protect their reparations
payments. and the American Govern
ment. striving to defend it's nationals
who have invested in German securi-
ties
The French people believe that the
Germans are deliberately seeking to
bring down the Dawes plan by ex.
panding their own budget to astronom.
ical heights and by borrowing abroad
TO the limit of possibility. The end of
this campaign they see IL months
hence, when the German government
will announce that it cannot meet the
Dawes payments and demand a sweep.
ing reduction.
Such reduction might precipitate
another crisis such as that Of July.
1925, when the franc fell below
cents. 1t would certainly involve the
increase of French taxation, already
terribly high.
1T is hardly too much to say that in
192S-29, the actual choice might be be-
tween insisting upon German pay.
ments, which would lead to the col.
lapse OF the German mark, or grant.
ing to Germany such accommodation
franc. And in that dilemma, what
course would the United States take?
Our nationals have invested upward
of $4,000 .000,0 in Germany and
comparatively little in France.
Britain Backs Germany.
One might conclude that in such a
crisis Great Britain would support
france. for the British have an imme-
date stake in reparations which
passes 500 000,O this year and $780,.
100000 next year. They have a,so the
indirect stake incident to French debt
payments to them of $50 .0OO, 900 annu-
ally. which are contingent upon Ger.
man performance under the Dawes
plan. Were German payments to
cease, the British would lose annual
payments about equal to their debt
payments to us.
By contrast, the British have the
utmost interest in preventing another
German smash, which would be inf.
nitely more dislocating to Europe as a
whole than any similar French dis
| aster. British economic recovery re-
mains contingent upon the existence
and increase of stability in Europe.
Thus the French fear that were a new
reparationS crisis to come not only
would they find America supporting
the German thesis, but in addition
| they would see Britain divided, il not
actually favorable to Germany.
Given these facts, it is clear that
French opinion is hardening against
any proposal for shortening the term
OF the occupation of the Rhineland.
France believes that the German de-
sire TO get rid of the troops will act as
a powerful deterrent to any arranged
evasion of the Dawes payments. For
seven more years, at least. there is
this measure of guaranty.
Delayed by Gilbert.
Despite all the disappointments and
apprehensions which have followed
the making of the Locarno pacts, be.
lieve it would have been possible to
hasten evacuation of the Rhineland
had 1T not been for the explosion over
the Dawes plan provoked by Gilbert's
letter. The undercurrent of opinion
IN both countries favorable to adjust.
ment is still very strong.
But France, like all other demo.
cratic countries, is ruled by politicians
who have to face elections. And taxa.
ton Is by all odds the most dangerous
or all election day questions. To .,aye
TO explain that they had passed new
tax laws and imposed fresh burdens
| because Germany had successfully
evaded reparations payments would
be to invite swift defeat. No impor.
tant politician would run this risk.
When all is said and done. the
1 Dawes plan remains the single present
guaranty of peaceful reconstruction
In Europe. 1t is just as impossible
now to modify it's terms without grave
| disorder as it would be to attempt to
remake frontiers.
| In my judgment. the present crisis
will pass without any serious conse
| quences. While the whole German
people would naturally welcome reduc.
ton or disappearance of raparations
payments. the vast majority are op.
posed to new quarrel with Fra a:lte.
Payments for the present year can be
insured easily; what comes later can
wait.
Meantime, the whole incident sun
plies a highly Illuminating glimpse Of
/ the essential fragility of the cotempo.
rary system of postwar readjustment
! in Europe.
fCopyrisht. 1927