Evening star., 1928-03-11
GERMAN DEBTS PAYMENT
HELDDEPENDENT ON RUHR
Agreement of u. S. to Sale Of Bonds
in This Country Is Also De-
cIared Necessary.

annual contribution up to a maximum
Of S625 100000 annually. This point
will be reached In the next Dawes
year, 1929. The capital value OF
this sum, allowing for a 40-year
amortization might be fixed roughly at
10000 100000. But the Dawes plan
fixed no period of years during which
Germany vas to pay the maximum.
Thus, to establish the total Of repara-
tions the first step would be TO decide
for how many years Germany must
pay the maximum OF S625, 100000 an
nually.
Thus, what would happen would be
that, when the process OF totaling the
debt and selling shares was completed,
the investors Of the world, TO great
extent American. would hold German
railway and government bonds to the
tune of s10000.000 900. Our associates
of the war would have paid off their
debts to US and to each other. Repa-
rat .ons being settled. military occupa-
! ton would be terminated and the
Dawes plan machinery. having served
its purpose, would cease to function.
The chief difficulty in the way OF
such a settlement lies In the present
conviction Of the mass of German
financiers and business men that an
nual payment Of s625.000,0o0 is too
high. and thus reparations settlement
of l0000, 600 900 Is in excess Of Ger
man capacity. Political leaders have
told me that the sum could not ex-
ceed $4,000. 100000. and at luncheon
where I met many OF the leading
bankers $4,000 900 900 was suggested as
| the maximum reasonable figure.
| Both figures would represent capi-
| tai sum clearly inferior to the capital
value Of the allied debts TO the United
! States. Thus IL the total were fixed
at $4,000, ,00O. 900, the French share
would not be adequate to discharge the
! British and American debts. let alone
meet any part Of the reconstruction
costs. The British, on their side, would
! have to pay Us more than they got
/ from Germany and their allies, thus
! Vitiating the Balfour note policy.
| Turns to United States.
| At this point the German turns to
| the United States. He would like TO
| convince the American world, financial.
! business and political, that a general
| settlement of all the problem Of war
debts and reparaticns would remove q
| very grave obstacle to the return OF nor
NAL prosperity in Europe. He argues
| that If these obstacles were out of the
way Europe would go ahead. In
| Europe America has large investment
| already: with 1t there Is huge annual
| trade. which would expand autonatical-
ly. provided prosperity increased.
| On the allied side encounter grow
1 ing belief that failure 70 fix the fgure
! before too long may result in dimuri-
| ton in the maximum sum Each day
| the legal period OF occupation auto
matically grows shorter and thus the
| value of this inducement diminishes.
Looking az the prublem ohlectiTely. I
should say that The hope in Germany
is that next year II will be possible by
international negotiations to arrive st
a general agreement. in the making Of
which the Cnited States viii particle
pate. that this agreement viii be based
upon a liquidation Of military occupa-
ton. reparationS. interallied debts by
January /. 1890, when the allied armies
would normally quit the second zone
on the RhinelAnd. Instead. they viii
leave all German territory.
! BY this agreement the United States.
/ IL is hoped, will agree TO accept q
| large cash payment, at least two-thirds
! Of the present nominal value Of the
/ debt settlements thus extinguishing It's
/ claim upon its associates, that 1t viii
/ agree. under proper guarantees. 70 the
marketing Of German securities In the
United States. that interallied debts
that in addition France will receive
on account sum sufficiently large
10 enable the French government TO
justify premature evacuation OF German
SOFT
We are as have said. about done
with all the great European campaigns
for cancellation. We are rapidly ap-
preaching the point where liquidation
of all the money and military problems
| left over from the peace treaties viii
be attempted upon a business basis.
tCopvriSht 1881