Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-06
By FRANK Fl. SIMONDS.

~HE assent of President Coolidge tc
the proposal of certain Euro
pean nations that American
representatives should serve or
the commission to complete tbs
task begun in the Dawes plan and f1N
the sum of German reparations raises
once more the most difficult and most
important of all the postwar problems
In its essence the problem is SIM
pie. for 1t comes down TO the single
question as to whether the United
States is prepared to exchange the debt
settlements which 1t has made with the
allies for a single blanket German mort
gage. In a word. are we willing to
take mortgage Of $4,000 900 600 upon
German industry and business in re-
turn for our present debt claims upon
the governments of France, Belgium.
Italy and Great Britain?
Such a change does not involve any
real reduction of the sum to which we
are entitled by the debt settlements.
While nominally these amount to some
$l2 900 100000, their present actual
value-that is. the amount which would
discharge them-reckoning al a S per
cent rate of interest, would fall slight
II below the S6,000000000 mark.
On the other hand. the security for
the proposed German transfer would be
another question. AS it stands today
we are possessed of the obligations Of
the four allied governments, which
bind them to pay us around $12.O00.-
100000 to meet their wartime borrow
ing. France. to be sure. has not rati-
fed her debt settlement, but she is
meeting the annual payments as if she
had ratified.
II the program that lies behind the
present proposal should go through. the
steps would be something like this:
First the allies and Germany would fix
the sum of reparations.
Since Great Britain demands that
she shall get as much from Germany
on account of reparations and from
France and Italy on account of debts
as she is paying the United States:
since in addition France demands a
sum sufficient to enable her to pay her
debts to the United States and Great
Britain and meet the costs of recon-
structing her devastated area; since
Italy demands enough to pay her Brit
ish and American debts, it is easily as
cer$ainable that the smallest amount
which would fulfil these requirements
would be S3,000,0 900, 000 represented By
an annual payment of some $3.50, 900, 900
for So years.
Preparation of Bonds Next.
Assuming that this sum were fixed.
the next step would be the preparation
Of some 100000. 900 of German bonds.
These would be based upon German in
dustry. German railways and possibly
In part upon a direct charge upon the
a per cent would belong to Great
Britain, 54.5 per cent to France, 10 per
cent TO Italy and as per cent to Bel
GUM. The balance would go to small
er States and can be ignored in the
present calculation. On the basis of
the various debt settlements Great
Britain would receive in addition to her
own share a considerable portion of the
French and italian shares.
The next step in the proceeding would
be the transfer by Britain, France, Bel
GUM and Italy of German bonds to
the United States to meet their debt
obligations When the whole process
was completed the United States would
hold about $4,000, 100000 of German
bonds. italy and Belgium would be
about square. France would have about
S1,750 100000 to meet her devastated
area costs and the balance would be
scattered among lesser states, minor
part coming to us directly.
But since the United States has stead
tasty insisted that debts and repara-
tons are distinct and that it does not
have any interest in the settlement of
reparations, one may fairly assume that
our Government will not consent to
any simple process by which the allied
debtors liquidate their obligations to
us by turning over German bonds. AS
a consequence, an intermediate step is
necessary.
intermediate Step.
This intermediate step would consist
In the actual issue of these $4,000 600, 900
bonds. their sale upon the markets OF
the world end the transfer to the