Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-27
BY FRANK II. SIMONDS.

Morgan are to sit as unofficial Ameri-
cans. Nor is it beyond the limits of
probability that war or peace in Europe
will turn on the success or failure of
this great undertaking.
Nominally this commission is to do
no more than to liquidate the Dawes
plan by settling the amount of German
But behind this seemingly simple task
lie all the great problems of contem-
pOrary Europe. The evacuation of
German territory by allied troops, the
not less necessary evacuation of Ger
man financial fields by Allied commits
sioners, the restoration of full and I'M
trammeled liberty to the German people
these are the primary conditions of
Q real restoration of peace in Europe.
The essence of the problem can be
Simply stated. Five years ago Germany
and her conquerors, represented in
London by various conferees, with
whom were associated Vice President
Dawes and Owen D. Young, undertook
to settle the immediate problem of rep
aratlons. Germany Frustrated by war,
Frustrated by imitation. by the occupa-
ton of the Ruhr, was incapable of
making any payments. On the other
hand, her opponents of the war, stag
gering under their burdens were to-
tally unwilling to permit Germany,
through bankruptcy, to escape from
all payments.
Payments Scaled Upward.
It was necessary to take the whole
question of reparations out of the do
main of politics. In this situation the
f1nanciers proceeded to elaborate an
intricate system by which, on the
basis OF immediate and eventual con-
ditions. German payments were fixed
for the next five years. At the outset
money was found in foreign loans to
enable Germany at one time to fortify
her newly re-established currency and
10 meet the initial payments under
the Dawes plan. BY steadily rising in
StallmentS German liabilities were fixed
and the annual contribution was scaled
upward to reach the maximum level of
$625, 100000 in the current year.
No one knew then. no one could know,
whether 1t would be possible for Ger
many, PROSTATE as she was In 1924. to
fulfill the requirements of the plan, but
is was carefully provided that, If failure
came, through no fault of Germany,
there would be no recourse to coercion.
It was also provided that no payments
should De demanded, in case such pay
mentS threatened to precipitate q new
sure OF the success of the experiment S.
Parker Gilbert, with a considerable
corps OF assistants, was established in
Germany to exercise what amounted to
foreign surveillance of German
finance and business.
Every one realized that the real mean
ing OF the Dawes plan was discoverable
IN the provision of period of five years
curing which Germany. protected from
all YaaIffina1 is~fa
take her own economic and financial
reconstruction. At the end of nearly
five years 1t is now clear that the terms
OF the Dawes plan were reasonable.
Germany has recovered her financial
and economic stability. She has met all
the payments provided by the plan, she
Is now paying under the maximum
schedule. And so far the payments have
not interfered with the truly marvellous
restoration of German domestic pros
perity.
Also Seeks Evacuation.
We have now reached the point where
Germany quite properly demands that
the sum total Of her obligations shall
be f1xed. Today she is merely bound
10 meet the maximum charge of the
Dawes plan, $625.000. 900 annually, for
an indefinite number of years. She
also demands that along with this
nxatlon shall go the complete evacua-
ton of her territory by both the mill
tary and financial garrisons of the
allied powers.
It is clear that under any fixation of the
total sum OF the German reparations OBJ
IgationS payment will extend over MANY
years. Whether the Germans are asked
to accept $4,000 DOC, 900 or $40 OOO, O0O.-
600 as the capital sum of reparations.
actual payment will take the form of
annual contributions stretching over
from 80 to go years. But during this
time the creditors, France, Belgium,
Britain and Italy, once the occupying
forces are withdrawn, will have no
pnysicai means of compelling payments.
All the occupying powers are deter
mlneo before final evacuation takes
place to obtain some guarantee that
they will be paid. And this determine
ton is dictated by the fact that for
more than half century all of these
powers are bound to make annual paw
ments to the United States to liuuidate
their wartime borrowings.
Must Seek Guarantees.
Thus the problem of the new COM
mission Is primarily to fix the sum
total OF German reparations and the
amount and number of annual paw
nlents by which it is to be discharged.
But not less patiently 1t is bound to seek
some method by which Germany's
creditors can be assured of payment in
full and thus can be prevailed upon to
assent to immediate evacuation Of Ger
man soil.
In this situation no insurmountable
obstacle Is found in the fixation of
sum. Germany has many times in re-
amounts to from $500, 600, 900 to $10,-
GOO 100000 as capital sum-
In practice reparations are likely to
be fixed with regard to three factors
first, German capacity; second, the sum
OF allied debts to the United States;
third, the costs of Belgian and French
reconstruction. This means that the
allied nations will strive to get from
Germany enough to pay the annual
costs of their debts to the United
States plus the annual cost of recon-
struction to France and Belgium. The
Germans, on the other hand, will Ger
tainly maintain that this total is excess
sive.
One may fairy assume, however that
4 in view of Parker Gilbert's recent
declaration that Germany is able to
pay the maximum sum of $625, 900 600,
no considerable reduction is likely.
germany is thus certain to be held for
an annual payment of not less than
$500,000,000. AS far as American debts
go, under existing debt settlements
Britain, France. Italy and Belgium now
pay slightly more than 5000, 1000, 900
annually and the total will rise sharply
In the succeeding years to rather less
than $3.50, 600 at the maximum.
On the basis Of $500 100000 annually
the German payment would permit
the allies to pay the United States and
the French and Belgians to liquidate the
bulk of their reconstruction costs.
Railways Would Be Bonded.