Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-09-01
GERMAN WAR DEBT
OBLIGATIONS GAIN
Nation Is Expected to Pay
5000, O0O,O00 a Year
Under Dawes Plan.
RY IOHN r. SINCLAIR.
cciai Dispatch 10 The Scar snd the North
American Newspaper Alliance.

Special Dispatch 10 The 8sar and the North
American Newspaper Alliance.
NEW YORK, September 1.-The
Dawes plan for getting reparations from
Germany. launched In 1924, really
starts In earnest today The first four
wears have been years Of experiment
in which Germany has been allowed
gradually to increase the annual amount
paid to the Allies.
Beginning today, Germany will be
expected to pay the full $500 100000 a
wear for nm indefinite number Of years.
Can she do IL? This is the question
upnermost in the minds Of international
students Of finance.
The provisions Of the peace treaty,
which required Germany to make A
payment Of approximately $4,000 900, 900
within less than two years. failed. Then
the London conference OF 1921 fixed
Gcrmany's subsequent burden OF rcpa-
rations at $31 ,0O0, 900, 600 But 1t is
one thing to Ak an amount nation
Is to pay and another thing to receive
the amount demanded.
When the war was at its height the
leaders of the allied nations met and
agreed to have no commercial deal
inGs with Germany at any time in the
future This agreement was applauded
by the war enthusiasts OF all nations.
who did not understand anything about
the basic laws of economies and finance.
Experience since the war has shown
TO the world that before any govern
ment can continuously discharge a
heavy debt to another government 1t Is
necessary that the debtor government
first be permitted TO stabilize its cur
rency and balance its budget.
In 1924 1t was seen that some plan
tn Iet
be- decided upon Three distinguished
Americans Gen. Charles G. Dawes of
Chicago; Henry M. Robinson president
Of the First National Bank Of Los An
gcles, and Owen Young. president Of
the General Electric Co, were selected
to represent the United States.
The Dawes plan~-so namd because
Gen. Dawes was chaiTman-~was the re-
suit. This plan was merely an attempt
TO recognize certain basic economic,
rather than political, fundamentals in
the fixing Of reparations. It was based
on Germanys economic capacity TO pay
and on the worlds ability TO receive
such payment.
The young Undersecretary Of the
American Treasury. S. Parker Gilbert,
was selected as agent general for rep
arations payments. The plan has been
In operation for four years Mr.. Gil
bert estimates that between January /.
1925. and May 81 1923, Germany's for
eign borrowings have been 81 .2B5 ,000,-
600. The total amount of reparations
payments made by Germany during
this time amounted To Sl,l3o.000 600.
It is seen. therefore. that Germany bor-
rowed s155.o00.O00 in excess Of the
venars tions payments which she met.
81 ia 4r SN
allies this amount of about $4,000
n day?
She must do It in one Of three ways.
First, by selling To the world at least
$500 200 900 a year more In goods than
she buys, thereby establishing that
much outside" credit which she can
use to square this obligation.
Second, by borrowing $500 600 900 a
year from other nations. thereby again
getting credit sufficient to take care OF
these obligations.
Or she can use n combination Of the
first and second plans.
There is another way in which she
could meet the obligations and that IS
by sending to the allies the amount IN
gold But this would completely de-
tnoraii2e her internal finance. Such a
move is out of the question.
But Germany, in every year since the
war, has had TO buy more goods III value
outside of her boundaries than she has
sold There does not seem to be any
immediate prospect of change in this
regard this year II looks as though
Germany will need TO borrow heavily
from the allies to meet reparations pay
ments for some time to ccme,
Otherwise the big test starts this
year. beginning today 1t In only be-
ginning too, for the total amount Of
the reparations which Germany is to
pay finally TO the allies has not yet
been definitely fixed,
A business man wants to know why
the Ford Motor Co was not included In
the billion dollar corporations yesterday.
The Ford Co belongs entirely to the
Ford family. There are only three
stockholders and Mrs. Ford and
their son. EdSel Ford Not share
Of It's stock Is listed on any exchange,
Its reports are condensed. and II Is
impossible To state accurately the
amount of invested capital In the husi-
ness. Only once. when he was buying
out all his partners. has Henry Ford
asked Wall Street FOR money" That
was Sc "ral years ago, and he paid the
obligation off in less than year
However. AS the Ford Motor Co. and
Henry Ford are one and the same, 1t
probably should be included in the
second class. Perhaps even In the first
class, that Is, among those corpora
tions that have an invested capital of
one billion dollars or more But the
placing Of the Ford interests in q
proper classification at this time Is
more or less of guess,
New York City Is spending approXi-
mately s7oO.0o0.0 900 In an attempt 10
solve Its congested transportation prob
lem More than 10000 persons are
at work day and night building new
subways In a desperate attempt TO re-
lieve the traffic problem of Americas
largest city While this has been going
on for years far below the surface
there is little on the surface to show
that any such stupendous work is being
done
fCopytight, 1929, hy North American News
paper Alltance1
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B. &. 0. DIRECTORS TO MEET.