Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-02-09
BY PAUL SCOTT MOWRER.
Special Gable Dispatch to The Star and Chi
cago Daily News.

|
debt agreement.
The last grave obstacle to Franco
German rapprochement would be thus
removed, and for the first time the
shape of something like q united Eu-
| rope would emerge.
The crux of the problem Is still Ger
many's capacity to pay and here Is
where the alteration begins. Ger
many's stupendous economic recovery
was wildly described in the last report
of the agent general for reparations,
Parker Gilbert, and 1t leaves no doubt
| Of the ability of the Germans to pay on
the present scale. That Is, SO long as
the present prosperous conditions last
But these circumstances include the
willingness of Germany to continue
alternating property by borrowing and
the Willingness OF the lender to trust
| Germany.
Both of these circumstances are
strictly limited. Moreover, the Dawes
plan specifically stated that the Ger
man living standard should not be
forced below that of other countries.
Today, while Germany is apparently
prosperous, the current interest rate is
about per cent, showing the painful
capital shortage. Such a shortage has
been caused by the urge to business
1
German people.
Germany's Argument.
| Germans claim that under the Dawes
plan their right to normal" business
expansion comes before the payment
Of reparations. They want part OF
the cream themselves.
The creditors answer that the Ger
mans have the right to enjoy comforts
to drink milk-but all the cream
must be skinned by the agent general.
The experts task consists chiefly In
the completion Of reparations arrange
n1ents, called the Dawes plan, whereby
1t was attempted to calculate scien-
tifically the amount which could be
annually extracted from Germany
without killing or partially strangling
the goose that lays the 0oiden eggs.
Under the leadership Of an Amer
lean, Seymour Parker Gilbert, and q
group OF trustees, a number Of foreigners
took as pledges certain German taxes,
the Reichsbank. the German railways
and the more important German indus
tries. They undertook to save Ger
many from excessive demands. This
plan operated for approximately four
Smoothness. During this period Ger
many paid about 6,750, 100000 marks,
which, added to the reparations previ-
ously credited, makes total Of about
$4,000. 600. 900.
| Imperfect in Two Ways.
But the Dawes plan Is imperfect in
two ways. The annual payment was
fixed, but no time limit was set, and only
incomplete arrangements were made for
the commercializing Of the German
debt.
Mr.. Gilbert, therefore encouraged the
governments to call q second meeting
to fix the total, without which no sim
cere German cooperation could be
hoped for or expected. Inundated by
the harsh discussion which has fol-
lowed each learned announcement on
reparations matters, the new body Of
international experts have already an
nounced that the proceedings will be
held in complete secrecy.
This statement fails to frighten In
Vulnerable newspaper men, who count
on the old adage, somebody always
tells" But should they be deceived, the
mere logical Of events will lead to Ger
tain unacceptable conclusions. The COM
mercialized debt is limited by time
amortization and 1t is hoped that the
German debt will be commercialized
and, over a period Of perhaps 10 years,
used largely for repaying in cash Euro
pean debts to the United States.
Fair Estimate Suggested.
On the supposition that such debts
will not be reduced, fair estimate Of
the amount necessary to do this is S.
000, 000, 900. Therefore the German COM
mercialized annuity must contaan in
terest on the sinking fund for this sum
or, at usual average rates, $3.50, 0O0, 900.
Whereas Great Britain and Italy are
satisfied. to have their debts abroad
Cancelled out, Belgium and some little
countries want supplement. Reckon
ing literally, 1t Is possible to assume
about $126, 900 900 annually. This would
make Germany liable for the sum of
approximately 100000 900 marks an
nually, as against 100000 normal
under the Dawes plan.
But q similar result can be reached
by another method. The best observers
agree that Germany will receive some
diminution as the price OF her con-
J senting to risk waving transfer protec-
ton and cooperating in the CONNER
cializing Of the debt, thus renouncing
the possibility Of further dimirution of
payments through political incidents.
German public opinion would not
seriously consider a diminution Of less
than 20 per cent.
Therefore it Is plain that any figure
fixed upon over 90 per cent will be a
victory for Germany and any figure
under it, victory for the creditor
nations.
Frances Intentions.
France apparently intends to ask
continuance Of the present annuity OF
1850, 00O, 900 marks for 60 years with,
however, the possibility Of reduction
through commercializing part Of the
debt and thereby paying parts OF
Frances own debts to Great Britain and
the United States.
France contends that Germany, as
: shown by the Gilbert report, is remark
ably prosperous and can and should
pay the present figure.
II no agreement Ii reached, France
J will refuse to evacuate the Rhineland
and will insist on the application
{ against Germany of the Dawes pay
' ments provided under the prosperity
: index, which already has increased the
r payments per cent and, 1t is estimated
would increase the payments 2 per cent
a. Germany considers herself still poor
and that contrary appearances are nias