The Daily Worker Newspaper, May 30, 1924, Page 8

The Meaning of Experts’ Report FTER a work of 1 more than three months the Commission of Ex- perts handed over its report to the Reparations Conimission on April 9. This report, along with its supple- ments, makes a rather large pamphlet and space does not permit of our fully setting forth its contents. We assume that the essential contents are known to the reader from the columns of the daily press and we shall only give prominence to the principal features of the report. Payment of Reparations Only When The Exchange is Stable. In- the past years the Reparations Commission demanded payment; both in foreign «currencies and: in goods, without. any. regard to the question whether the German rate: of. exchange could endure such a burden. Contrary to this ‘the Expert Commisson takes the standpoint that Germany can only afford reparation payments when the German rate of exchange is stable; be- cause when the rate of exchange fai= the state income automatically shrinks to such an extent that. payments are impossible. Therefore, the stabflity of the German currency is to be pre- served in spite of reparation pay- ments. Reparation Payments in Germany Currency. As a consequence of this, and with the exception of payments in goods, Germany shall only pay in German currency. The prescribed payments shall be made in German money to the account of the Reparations Commis- sion at the Note Bank (Reparations Bank) which is to be founded. With the @epositing of the prescribed sum Germany has carried out her share of the bargain. It is the business of the Allies as to how they shall get out of the country the amount of the repara- tion payments which have been made in-Germany money. For this purpose the report provides for a commission of five and a special agent who shall see to it that the sums deposited. by Germany are sent abroad in suitable form. It is the old question: In which form of goods can Germany pay the reparations, that is, in which form of goods can the reparations be atcepted by the Entente without causing seri- ous damage to the industry of France, England, and the remainder of the cap- italist world? Naturally, the report does not solve this question because it is insoluble. It decides that the Ger- man payments may be accumulated up to. a sum of two milliard gold marks in money. All amounts beyond this shall be invesf@d in German se- curities up to a maximum amount of five milliard gold marks. Should it prove that no method can be found for the acceptance of the reparation paynients, Germany’s payments will be reduced until such time when it will be possible for the Entente to carry out the transmission to foreign countries. The report destroys all those plans which sought to solve the reparations question with one sweep by the tak- ing up of an international loan run- ning into millidrds. (Proposal of the Cuno Government for a twenty mil- liard gold mark loan.) ll the fairy tales of American help, the whole * conception that by transferring the wealth that has been piled up in America, and which is partly unused (the huge gold reserve of the Federal Reserve Banks), an important cause of the crisis could be settled at the same time as the reparations ques- tion, has faded away into nothing. The report provides for a single loan. of eight hundred million gold marks which shall be employed for the pay- ments in the first year. From the point of view of World Politics this solution, if it is carried out in deed as well as in word by the Entente, signifies the defeat of the French Policy of force amd the victory of England. The lines of French po- licy, the final separation of the Rhine and Ruhr districts from Germany, separatism in Bavaria and the separa- tion of southern Germany from ‘north- ern Germany, the breaking up of Ger- many in this way into three or four parts can be considered as shattered. The report is expressly based upon the standpoint that Germany must form a united economic whole if she is to be able to pay reparations. The solution at the same time prevents the uniting, in French hands, of the continental deposits of Goal and iron, which is of great importance for the economic and political power of France in relation to England. Germany Becomes an International Colony. The shattering of the French plans of power do not signify that Germany will now become a free state, Un the contrary, the report provides for a severe, systematic control of Ger- many by the Entente. As a mat- ter of fact, with the carrying out of the measures which are provided for, German economic life would find itself under the control of the Entente. This control will extend. to the rail- ways, the federal finances, and to the whole financial policy by-means of the Central Note Bank which is to be created (in which all existing note banks are to be taken up) and to the German taxes, the amount of which is to be laid down by the Entente. The Payments and Germany’s Ability to Pay. As is known, the report provides for the following payments: First year ....1000 million gold marks Second year ..1220 Third year......1200 3! rH 5 Fourth year....1750 *. ot ay Fifth year........ 2500 *, ” 1 First 5years 7670 at, bs # Of this sum 800 millions are to be obtained by a loan, so that for the first five years,.payments of less than seven milliard gold marks are pro- vided for. The payments from the fifth year onwards shall amount to 2500 million gold marks annually and perhaps more, A prosperity index has been provided for which shall be made up out of various, rather unrelated, elements (railway traffic, population, foreign trade, tobacco , consumption, budget expenditure, and coal consump- tion). If these factors, reckoned ac- cording to a certain system, give an increase in the later years over the level of 1926—1929, Germany’s obliga- ions will be correspondingly in- creased. The report lays down from what sources the reparations are to be drawn, that is it confiscates cer- tain kinds of income for repara- tion payments. We do not wish to go into details here, as we may assume that they are known. The principles pronounced in the re- port by the specifying of these sources were as follows: 1. The railways have got rid of all their debts by the depreciation of the currency. They represent a a capital of 26 milliard gold marks. Before the war they had a net income of over 600 million gold marks, or at the pres- ent value of money of about 1000 mil- lion gold marks, whereby it is to be emphasized, that in the pre-war days the German railways were not treated as an enterprise for profit-making but in the first place as an instrument for the economic development of Ger- many. Under these circumstances it is easily possible to draw from the railways 660 million gold marks in the form of interest bearing bonds and amortisation of the same and in addi- tion a railway traffic tax of 290 mil- lion yearly. : 2. German industry has got rid of its debts by the depreciation of the currency. Therefore it can shoulder a reparations debt of five milliard gold marks, which at 5 per cent in- terest and 1 per cent amortisation shall yield 300 million gold marks yearly. 3. In the treaty of Versailles ‘it is laid down that the rate of taxation in Germany may not be less than that of the entente countries. On this basis it is reckoned that until the year 1928-1929 Germany can afford from its budget a sum extending up to 1250 millions gold marks for reparation payments. In order to secure these payments the income from. the taxes on tobacco, beer, alcohol, and sugar, as well as the customs receipts, are to be paid into the reparations account at the new note bank (Reparations bank). If these taxes and customs yield a higher sum than is provided for, the surplus will be released for the needs of the German state. Two 4 questions arise here: 1, Can the sums provided for be taken out of the yield of the economic life of Germany, that is, out of the value produced by Germany as re- duced to her present size? As far as the first five years are concerned one can answer this ques- tion in the affirmative. By the sav- ing which has been effected by the disappearance of the state debt and the reduction of the military expendi- tures, this amount’ can, in our opinion, be covered, assuming that the politi- cal rule of the bourgeoisie is firm and that the process of production is not disturbed by severe social struggles —an assumption that will hardly be realized. As regards the full payments after ffve years, we are compelled to doubt if the German economic system can bear the withdrawal of such great sums.. In the meantime the extreme- ly unstable balance of capitalism does not permit one to say very much as to how things will be in five years. 2. Can one find a form of goods in kind which will enable the German payments which are provided for to be brought out of the country? For the first five years one can give an affirmative answer to this question, for when we deduct the de- liveries of coal and coke, which are not only gladly accepted by France, but which are absolutely indispensa- ble for her industrial life, there re- mains an insufficient yearly amount which has to be exported in currency or in goods; an amount which can be absorbed in the form of German goods in the world market if no acute eco- nomic crisis occurs, The matter stands quite differently if the pay- ments are to be made in full after five years. Annual payments of 2500 mil lion gold marks can only be rendered if the exports of Germany exceed the pre-war. figure by many milliards.. We say many milliards, because Germany cannot, export only those wares for which all the raw materials and auxil- iary materials are to hand in Ger- many, but naturally must also import such materials from abroad. At pres- ent the whole-of western Europe can- not find a market for its full produc- tive capacity and this state of affairs is, in our opinion, not a passing one and such a great export of German goods would lead, with the present re- duced ability of absorption in the world market, to a severe disadvan- tage for French and English indus- try. . We are therefore of the opiz- ion that the whole payments can neither be made by Germany nor be accepted by the entente. The Meaning of the Report. The report was accepted unani- mously by the experts. As we can as- sume that the experts acted in agree- ment with their governments, this sig- nifies that the entente governments, that is, the entente bourgeoisie, con- siders the proposed solutions as right. Now what is the economic signifi- cance of this report? In our opinion it is essentially the following: The entente bourgeoisie now sees that it is impossible to obtain repara- tions from Germany on such a large scale as was provided for in the vari- ous ultimata. The entente bourge- > THEME. From the tall mountains Snow melts. Laughingly, clearness Ripple over pebbles by the white stone walk: An avenue at the edge of wide fields eager veins of a wet Undulating from the hills. Immature fields Await quickly Contact with lips of the water. An adolescent boy Uncouthly faltering ancies Lingers nearby. A laughing moist-eyed girl As wind chuckling nervously before the thunder Or piano fingered delicately before the rush of tone —A plant wafted by approaching throb of storm.... Eager veins of inspiration Over yielding earth Desire bursting forth of seed: - Snow melts. hungry expect- HASKELL REIN. By E. VARGA E. VARGA oisie are ised Wie’ tha Mistake: with the alternative: Hither to obtain reparations but at the price of the keen competition of Germany on the world market, aiid as a consequence, depreciation of the mark, social disorders, and a dicta- torship of the right or of the pro- letariat in Germany; or to renounce the reparations for the amount that was provided for, to gain a deciding influence in German economic life and to make such use of it that Germany can be kept down as an industrial ri- ral. In other words: Less reparations but no re-establishment of Germany as a dangerous competitor in the world.. The report signifies. that the entente bourgeoisie has decided .on the latter solutton. If we assume this to be the case the conclusions of the eport, which in part are somewhat strange, become fairly clear. The mortgage upon the railways and the tontrol of the German -rail-” ways will be settled by the entente, and in such a manner that German in- dustry will not be able to give an artificial stimulus to its exports by means of preferential freights on goods destined for export, as was the case before the war. ‘The five milliard mortgage upon German industry signifies that the cost of production of German indus- try will be correspondingly increased. The control of the Note bank sig- nifies that the discount policy of the _ central note institute will be fixed by the entente bourgeoisie. and the amount of the credits to industry, as well-as the rate of ifiterest, will be set in accordance with the needs of the English and French bourgeoisie, while the development of German industry can be hindered by limitation of credit and high rate of interest. The investment of five milliard gold marks in German shares (this amount may be increased); signifies that the entente bourgeoisie, -which, as it al-. eady holds considerable amounts of he shares in German industries, gets possession of the most important branches of German industry. Taken altogether this signifies that Germany comes under the economic control of the entente bourgeoisie and that this control will be exercised be- fore all with the idea of suppressing the ability of Germany to compete in the world market and to restrict the development of German economic life. In our former reports we have often pointed out that the spokesman of the English and French bourgeosie are al-~ ways emphasizing the following: Eng- land has a debt of about 150 milliard gold marks upon which she must pay interest, whereas Germany, owing to, the depreciation of the. currency, is free of debts. This signifies that the English manufacturer has to pay much higher taxes than the German and that wages in England are highér than in Germany. Consequently a reparations policy must be adopted which ensures the ability of England and France to compete in the world market. As this does not harmonize with the payment of reparations on the old system of the payment of cur- rency without regard to the further fate of the German rate of exchange, since this would compel Germany to force her export of goods, the eco- nomic meaning of the report is: Less reparations, but the domination of the German economic system in order to prevent the dangerous developmeny of a new competitor of the entente bourgeoisie, in the world market. Baptists To Fight For Whole God At Coming Convention MILWAUKEE, Wis. May 29.—A fight on the issue of modernism and fundamentalism by the. Northern. Bap- tist Convention here next week was forecast by delegates to the conven- tion of the Baptist Bible Union of America. -The union will seek tor a confession of faith by the Baptist convention, committing the body to fundamental- ism. A fight to cut adrift from the Fed- erated Churches ot Christ also will be staged by the union, according to present plans. | | Beets . ’