Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-19
BY the Asanciatnd Press

BASEL Switzerland, August 19.--The
official summary of the Wiggin Com
nlittees report calling for revision of
war debts and reparations and the set
tlement of European disputes, reads as
follows:
THE report Of the Financial Com
mittee. which was set up by the Bank
for Internatio Settlements on the
recommendation of the London Confer
ence to inquire into immediate and
further credit needs of Germany and
to study the possibility Of converting
portion of her snort-term credits into
long-term credits falls into two parts,
according to the wording OF these terms
of reference.
THE first part, dealing with the i'm
mediate credit needs of Germany. refers
to the fact that the position which has
arisen in Germany is largely the result
of the world depression and partly the
result of the particularly vulnerable po-
sition in which the country found itself.
During the seven years between 1924
and 1880 Germany's foreign indebted
ness grew faster than the assets owned
by her abroad 1920, 900, 900 reichs-
marks. Her total indebtedness is esti-
mated at $4,000, 900 900 reichsmarks.
which of course, is in part offset By
German foreign assets amounting to
debt to foreigners Of about $4,000, 000,-
600 reichsmarks.
Paid Out of Borrowings.
at is largely out of borrowing that
PREPARATIONS have been indirectly met
IN two years a surplus of exports has
provided assistance, and there have
been, of course, receipts from services.
And it follows that, in the main
M oil kyg
curing these years were not effected
cuts Of Germany's resources and will
not be so effected until the appropriate
part of these commercial debts are re-
paid. in the form either of gold, goods
or services.
I'm the immediate past 1t appears
that in 1929 there was a balance be-
tween imports and exports, but in 1880
when favorable commodity balance
was achieved, surplus and invisible
exports provided two-thirds of the
amount required to meet Germany's for
eign obligations, leaving one-third still
to be met by borrowings And this was
the most favorable year from this point
of view
1.-The weakness of the German finan-
cial situation at the end of 1880 arose
out of the fact that, whereas GeTinanys
foreign short-term indebtedness was no
tCcn tl4c3l 10youUs0UDtUUV 3clGIlSfndIkS,
having increased to that figure from
400, 900 900 reichmarks at the end of
1925 Germany's short-term invest
ments abroad, including foreign ex-
change at the Reichsbank, amounted
TO only about $500, 900 reichsmarks
''The increase in short-term indebt-
edness was quite out of proportion to
the growth of foreign trade and there
is little doubt that it was used to a
very large extent to replace working
capital when long-tern money proved
not available.
In Vulnerable Position.
while 1t would have been better If
these short-term debts could have been
converted into long-term debt. it was
probably not possible and in any event
was not done. When, therefore, an
outflow of capital occurred it found
Germany in a very vulnerable position,
which. in spite of an export surplus
existing during the first six months of
1881, produced a serious crisis
1T is estimated that the withdrawal
from abroad of short-term funds in the
first six months ~ 1881 amounted to
1900 900 900 reichsmarks. in addition
to which there was a certain amount
of selling by foreigners Of long-term
investments in Germany and purchases
by Germans of long and short term
investments abroad In all the outflow
appears to have been about 100000
reichsmarks
1.-THE committee expresses no view
regarding capacity of Germany to pro-
vide her capital needs out of an in
ternal savings, but emphasizes that the
piling up of her obligations is no ulti-
mate solution of her problem
THE immediate needs involve the
cessation of Withdrawals. for which
purpose the committee has been in
touch with the bankers regarding the
so-called 'stand-stilp agreements with
foreign countries whereby existing
credits win be maintained The COM
mittee concludes that unless part of
the capital withdrawn can be replaced,
the economy of Germany will con-
tinue in a condition of severe strain.
Assets Needed in Trade.
at is not believed that the mobiliza-
ton of German assets abroad provides
a remedy for the situation, since most
of these assets are needed in connection
with German trade and industry, and SO
are not avail able. The other possibility
would be for Germany to secure foreign
exchange by drastically reducing her inn
ports and making every effort to in
crease her exports. This solution is not
one which commsnds itself to the COM
m.ttee since 1t would involve diSlocation
of the economic life of Germany and
would also aggravate the world position
by reducing the sales of other countries
in ether markets
THE committee is of the opinion that