Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-30
FRANCE TO DEMAND
DEBT PAY INCREASE
Germans Contend That Ca
paCity Should Be Repara-
lions Basis.
BY Cable TO The Star.

BY Cable to The Star.
PARIS, January 30.-Advance testi-
mony of the contentious days which lie
ahead of the committee of experts
which will soon undertake definite
settlement of the separations problem
was given today when it was learned
that France is prepared to demand an
actual increase in the payments as the
only logical answer to Germany's in
sistence that her capacity to pay be-
come :ile basis of the committees
findings.
The campaign plan which Emile
Moreau. gOr1rnor of the Bank OF
France, and Jean Parmentier. governor
OF the Credit Foncier. as the chief
French experts, will follow at least our
ing the early days of the sessions was
outlined yesterday by one familiar with
IL. It's salient features are:
Would Replace Dawes Machine.
The suggestion that, should the COM
mlttee succeed in fixing the amount
and duration of the German payments,
1t arrange for the constitution of an
other committee Of independent finan-
clal experts to replace the present
Dawes plan machinery and arrange and
supervise the flotation OF Preparations
ponds over a period of years.
The argument that if Germany in
SlstS that the committee limit its study
10 her capacity to pay the result must
DE an increase in the payments. since
the present schedule was made when
that capacity was lower.
And the neutrality-suspicious. most
unexplained of all-that failure of
the present committee must mean thai
Germany shall continue her payments
according to the Dawes plan. but until
she has paid the full total OF 10000
O0O,OOO marks (about $33 900 600 OOO
set, not by the Dawes commission of
I924. but by the London PREPARATIONS
conference of 1921.
So widely divergent are the latter
two of these points from Cermanv's
expressed wishes that it is evident the
bitter.
Americas Position Difficult.
Thus 1t is expected here that Owen
d. Young and j. P. Morgan will be
called on to play difficult and promi-
nent role from the start i'll the capac-
lty OF the most neutral members.
The plan for final mobilization of
the debt has been worked out in con-
siderable detail. 1t takes full consid-
GRAFTON OF the fact that the American
market is not favorable to large bond
hotation. Consequently it foresees bond
issues on a rising scale over a period
of years. An issue of $40. 0OO. 900 is
mentioned as a possibility for the first
year.
Actually, however, the arrangement
OF these issues would not concern the
present commission, which, after de-
Gliding upon the amount and duration
OF the German annuities, would recon-
mend the creation of separate COM
mission of experts. supplanting the
present Transfer Commission and the
organization operating under the Dawes
plan, to handle the mobilization.
Transfer Believed Feasible.
More than one French expert on
reparations has insisted that mobiliza-
ton of the German debt through bond
issues presents an insurmountable OBJ
Stacle in the transfer problem. 1t is
understood however, that the countrys
two experts on the committee are con-
vinced that the transfer problem is not
grave.
The present scale of payments under
the Dawes plan plus the Index of pros
perity'' calculation would add from 8
to per cent to the German payments.
Premier Poincare has taken care that
France is taking that into conSidera-
ton when figuring how much she wants
from Germany. The fact that these
figures are on the opposite side OF the
ledger balance has permitted France TO
take the stand that Germany must
make the first move for change.
That first move is expected to be a
demand that the experts remake the
schedule OF payments according to ca
pacity to pay The French will argue
that the capacity to pay was once set
by the Dawes commission in 1924, and
that never in history had German ca
pacity to pay been so low as 1t was then.
No Time Limit, France Insists.
Since then every evidence. especially
the annual reports of S. Parker Gilbert,
agent general for reparations payments,
has shown, formidable prosperity"
Hence the capacity to pay must be
greater now than it was in 1924, and
French logic can see no other con-
cluSion than that the present scale Of
payments should be increased.
Parenthetically, it may be said that
France does not hope that this argu-
ment will succeed in increasing the
payments, but does hope it will dis
suade Germany from insisting on Ca
pacity to pay" ruling the experts.
France is making a strenuous effort
to disSipate what it considers the too
prevalent opinion that German pay
mentS under the Dawes plan are lin
tied to 81 years. A careful brief has
been drawn to show that the 37-year
limit applies only to the period of
amortization of industrial and railway
obligations and not to the total pay
mentS.
(CnnyrfChf 1oooO