Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-23
.W|GG|N TAKES OVER
.TASKOF BOLSTER|NC
FINANCES OF REICH
Third American Enters
Breach Since ArmiStice in
Order to Aid Germany.
DIFFICULTYIN BORROWING
HAS HANDICAPPED BERLIN
Failure of Dawes and Young
Plans Was Caused by Credit
Restrictions.
BY DIR. MAX wINKLER.
Special Dispatch to me star,

by DIR. MAX WINKLER.
Special Dispatch to The star.
NEW YORK. August 22.-Albeyt
Henry Wiggin, guiding genius of the
worlds largest bank, is head of q COM
mittee charged with the examination Of
Germany's fiscal condition. On the basis
OF the committees findings, arrange
ments we're to be proposed in regard TO
the outstanding short-term credits to
Germany, including obligations of the
Heich, the states and cities, as well
as corporations.
For the third time since the arnistice,
It Is an American who has devised q
plan to save Germany from economic
collapse. In 1924 Gen Charles @.
Dawes was instrumental in evolving and
putting into effect a plan which bears
his name, and which fixed the mini
mum amount Germany was to pay an
nually on account Of reparations, with
out, however, fixing the amount. Ger
many, on the verge Of economic chaos,
accepted the Dawes plan, the success Of
which depended upon the ability of
Germany to borrow and the willingness
OF the Reich's creditors to lend.
Loan Orgy Begun.
Thus began Germany's foreign loan
orgy, which continued well into 1929.
The collapse Of the stock market and
the cessation of foreign loans are cur
rent history. Germany could not bor-
row any longer. Hence, she was un-
able to pay any more. Her creditors
grew alarmed. Another American came
to the rescue, and a nsw plan was
brought forth, the Young plan. named
after its sponsor. Owen d. Young.
Before anybody knew it the Young
plan had grown old Like its predeces-
scr. its success depended on foreign Dor
rowing, and. unlike its predecessor, it
was not accompanied or followed by a
food of long-term loans to Germany,
which an enthusiastic public was eager
and ready to absorb two years earlier.
Instead, short-tsTm credits in ever-irl-
creasing amounts found their way into
Germany, prompted, it seems, BY more
liberal rate Of interest than was obtain
able in the United STATES snd not BIZ
the conviction on the part Of American
bankers that these credits are destined
to perform q certain definite economic
function
The crisis which developed as re-
suit of the immediate fncollectability
became so acute that outside aid was
required Once again, for the third
time in less than eight years, an Amer
lean it was to whose lot 1t fell to give
named after the chairman Of the above
mentioned committee The plan was
made public last week and provides,
among others, for the prolongation Of
short-term credits Some students in
cline to see in the report an intimatton
that repaTations should undergo dras-
tic revision downward. This view is
based upon q statement in the Wigg1n
report which reads as follows:
HnFtN e
before the end Of the period Of pro-
lcngati0n Of credits that the govern
ments give the world certainty that
international political relations shall
be established on the base Of mutual
confidence Nevertheless. we desire
to recall that the German problem
Is part Of a broader problem which
affects more than one country in the
world
The above observation is rather vague
and discreet, and it is somewhat dif1-
cult to conceive how it could be inter-
preted as presaging recommendation
that reparationS payments be cut or re-
vised However, Mr. Virgins views on
this question are well known. Last JAM
uary his statement to the stockholders
Of the Chase National Bank, In New
York City, contained a reference to his
firm conviction that it would be good
business to initiate a reduction OF all
debts. Whether It
Is liked or not, things seem headed in
that direction. The one-year mora
and accepted by all nations involved.
may mark the beginning Of the end OF
war debt payments.
Analysis of Payments.
Assuming that PREPARATIONS should
cease definitely, how much have Ger
many's creditors received to date IN
actual cash, exclusive Of deliveries in
kind, cession of territory, loss of col
onies, chant marine, equipment and
rolling stock?
An analysis of Germany's reparations
Dayrents shows that a total of $4.779,-
500, 600 has been paid out since the
prmistice on November IL, 1918, until
July /, 1881 This is at the annual rate
Of $S76, 600 900, or well over So per cent !
Of Germany's total imports of food.
stuffs for 1890 OF the entire amount
paid, France received 81 SAC, 300, 900, or
somewhat in excess of 40 per cent.
Great Britain follows, with S857, 800 900.
Belgium Is third, with SITS, 300 900, fol-
Owed by Italy. with S293, SOC. 900, and
Jugoslavia, with S166,200.000. The
United States holds seventh place among
he recipients of German PREPARATIONS.
With total of $165, 1000 Rumania
IS next, with SGT 200. 600. followed by
Japan. with $19.60o,00 Portugal, with
l9 SOC. 900, and Greece. with $40, 100, 900.
The bulk of payments was made dur
ng the period which elapsed between
November IL, 1915, and September I,
1924. when the Dawes plan went into
fleet, making its debut with an inter-
loan of 5000, 900 900, of which
more than half was taken by American
investors The amount paid during this
period aggregated $2,321 500, 900. OF
which France received 1884, 80o. 900. or
somewhat less than 81 per cent The
United States received during this period
! total Of S5S.So0 ,000
During the nve-year period when the
Dawes plan wes functioning successfully
/ total of Sits, 300,0 900 was paid. Of
which France received by far the largest
,art. Her share amounted to $o4l 400
700. or more than So per cent while
hat OF the United States totaled SILL
100. 900.
During the interval between Septem-
Yer 1. 1929, and the Inauguration OF the
Young plan, and representing somewhat
more than eight and one-half months
total of $245, 40O, 900 was paid. or
his amount France received sI63. OOl.-
100. or more than SIS per cent; while the
United States share totaled $4,000 600
From May II. 1880, to July /, 1891
5ermany,s payments aggregated $3.50
90. 600, of which Frances share was
226. 500 600, or about So per cent while
he United States received $l7s4UD. 0OO.
Copyright, 1881, by the North A1aer1ean