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The New York herald. [volume] (New York, N.Y.) 1920-1924, May 12, 1922, Image 2

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concrete grounds, however it may (ltf-1
fer. in the abstract.
The final paragraph reads:
"'The flUMion delegation taken note :
, ?. 'liui the great obstacle in the confer- ;
nee so far is this; namely, that the
idea of reciprocity called attention to
above has not yet been sufficiently
' I'eeogsiMd by all the 1'owers. The
Uussiun delegation cannot refrain
I t orn pointing out thut the preliminary i
aloAn/lt' ItoM lmra nnonAi) !
('OIIYCXfauuurt uui.au.) asvv* u%? , v v.pv ...
the way to Hfloser understanding be- j
i ween Soviet Russia and fhe" foreign
Powers. The Russian delegation is of'
the opinion that the differences which
have appeared in the course of the
solution of financial difficulties he- j
tvveen itself and the" foreign Powers'
ought not to prove an obstacle to the,'
possibility of a necessary solution herf
at Genoa of other problems interesting
all countries alike; and, in the I
.. first place, 'those problems touching
the economic reconstruction of Europe
and the consolidation for peace. Russia,
came to the conference with con- J
?. <dilatory intentions, and still hopes,
i hat efforts in this direction will be
crowned with success."
This paragraph, it is reported, was ,
dictated by Signor Schanzer yesterday i
hi order to save the belligerent aspects [
01' some of the previous parts of the reply.
"Whatever the result may be, it is
stated that all the Allies regard the situation
as extremely dangerous. While ;
the Italians and the British feel that
i-, 'hey ought to go on and the French and
7" ' lie Belgians are laughing cynically, it
1 certain that never since the confer- i
ence began have all four nations felt it
more necessary to hang together- ,
fiord (irurgr Assailed.
The. Russians begin with stating the- ;
ries as| tojHussian reconstruction, point- |
Jng out that there has already been a
ri^sh of concessionists into Russia, confluent
In the future of Russia, while the
est of the world hangs back, thinking
>>f Russia's past.
The reply cha-ges Mr. T.loyd George i
with direct failure to live up to the
greeinent reached In the Villa de Al-J
s berths in April, that a direct credit
should be granted the Russian Government
in return for the assumption of
hoso obligations, which she was -not
compelled, in the law. to assume.
It practically refuses an arbitral tri- 1
bunal to settle war debts, as composed
of four non-Russians and one Russian,
saying that the same prevalence of for- ,
< gners makes impossible the appllca- ;
tion of Article VII. through a mixed
arbitral tribunal. Article VII., Incidentally.
is characterized as an opportunity,
for the first time In history, to
present two theories of property rights
!-ide by side.
The note then makes this becT:ration:
"Russia is still ready, in order to as
ure the success of an agreement, to
consent to important concessions to foreign
Powurs, but upon the absolute condition
that concessions equivalent ar.d
corresponding: be made In favor of the
"Russian people by the other contracting :
^>arties. The great mass of the Russian
peoplri could not accept an agreement
under which the concessions were not
balanced by real corresponding advantages."
* This is regarded as the opening wedge
for a loan to the Soviet Government,
which even Mr. Lloyd George says is ;
impossible; but the reply suggests that ;
the whole agreement be remitted to a I
rnixK-d expert commission to meet at
seme future date'. That may yet be the |
course adopted, though Mr. Llo.vd
George was reported lute to-night as j
being determined to "fight it out on thr
Genoa line If it takes all summer," and
was said fo mean it literally. j.
Basis for More A c?ot iat ions.
Genoa, May 11 ( Associated I'rcss).?
Russia's reply is gen.raWy regarded as
conciliatory. At least it is considenMl
a basis for further negotiations.
The Russians and all the other dele- j
cations are saying many things for '
lorao consumption which It is believed
they do not really mean, and underneath
there is undoubtedly a general .
desire to reach some agreement which
will make Kuropo more peaceful.
The Russians have appealed strongly !
to Premier Lloyd George and the peace |
. < raving populations of the world in their j
support of the non-aggression pact and
their allusions to disarmament. Thty
liave sustained the basic principle of '
?. ommunlsm and desire to have further
discussions un the subject of nationullaa^
tlon. stoutly insisting that the Bolshevik t
Government may maintain any social
system and any system of property holdIn*
which it desires, and cannot consent
i to anything which may be interpreted
is limitation of its sovereignty.
France, Poland. Cxecho-Slovakia and
some of the smaller States would like
tj have the conference adjourned, and
econvened later. They will undoubtedly
lake advantage of the Russian proposal
for the reference of financiul problems
l.? a mixed committee to suggest that
this committee report at a lRter date to
another conference. Mr. Lloyd George,
however, is firmly against adjournment
of the Geoa sitting Without some settlement
of the Russian problem end will
- S, doubtless oppose M. Belies >. .1 other
leaders who have been working earnestly
for another conference.
M. Benes wanted to have a conference
called at Prague, but lias received lit tie
encouragement. Mr. Lloyd George and ;
his supporters have apparently regarded
all the efforts at postponement as part
of hhe French plan to delay any settlement
of the Russian problem which did i
not meet with their approval.
Sir Edward Crigg Against
Haste on Soviet Answer.
? ???_
Obnoa. May 11 (Associated Press).?
In behalf of the British delegation Str
Kdward Grigg. commenting on the Russian
reply, said: "The early part Is
Just the sort or empty politics wnicn me
Bolshevik I always produce anil which i
makes negotiations with them almost i
impossible. All these pages of argu- 1
inent are worth about as much as the I
paper money which is the chief product
of the Russian revolution. When you
set to the end you arrive at the real
substance of the document, which Is thi
question of reciprocity.
"Russia complain?! of being asked to ,
undertake serious obligations without ,
getting anything except rather vague
promises: contingent tiromlses lp the
way of credits. They clearly want to
know before accepting liabilities how
serious these liabilities are before exchanging
them against credits.
"One of the satisfactory parts of the
reply Is where (he Russian delegation
expresses the desire for peace and readiness
to Join In the non-aggressive pact."
Sir Kdward added: "We must deal
with the reply on Its merits: we cannot
use haste. The document certainly calls
for a rejoinder."'
One of the correspondents remarked :
'Till.* does not seem a yes or no answer
dots it?"
"We always said we would not gel a
ves or no answer,"' replied Sir Kdward.
Dispatches from Moscow said the
paper ruble was worth about f.,000 to
the cent.
wrsn tyvmnwi?
If so, see If It is advertised In tbs i.ost and
' "CUU'1 CQ'UMUS ut ? tie's Hiun leik lirrtld
- I'd..
Reply to Allied Terms Sujr-,
gests Board Be Named
By Conference.
... I
Note Assails America audi
Other Powers for Stand j
on Property.
Preamble and Clause Conflict,
Sovereignty Made a Plaything,
Soviets Say.
Genoa. May 11 (Associated Press). J
?The general conclusion of the Russian
reply reads:
The Russian Government sent its
representatives to the conference at
Genoa in the hope of achieving: an i
agreement with the other States,
which, without affecting the social
and political regime established in
consequence of the revolution nnd
intervention victoriously repulsed,
would bring about not aggravation
biit amelioration of the economic 1
and at the same time open the way
to amelioration of the economic
situation of Europe.
But this plan presupi^Bed that j
the foreign Powers who organized
armed intervention in Russia would
cease using toward Russia the Ian- ;
guage of the victor to the vanquished.
Russia not having been
vanquished. The only language j
which could have led to a common
agreement was that which States
adopt toward each other when contracting
upon a basis of equably.
Russia remains disposed, in order
to assure the success of the agree- !
ment, to consent to serious concessions
toward t!ve foreign Powers,
but on this absolute condition: that j
to these concessions shall correspond
equivalent concessions in
favor of the Russian people by the
other contracting parties. The
popular masses in Russia could not
accept an agreement in which the
concessions granted should not have
their counterpart in real advantages.
A different outcome, and one sug- l
gcstud by the difficulties nf the, sit- j
nation, would be reciprocal annul- '
raent of tho claims and counterclaims
flowing out of the past between
Russia and the other l'owe?.
But even in this case the Russian j
Government lias decided to respect
the interests of the small bondhold- i
ers. f
If the Powers desire to occupy
themselves with the solution of the
financial issues between themselves
and Russia, inasmuch as this question
demands deeper study of the
nature and extent of the claims presented
to Russia and a more exact ;
appreciation of the credits that
could he placed at her disposal, this
task might be confided to a mixed
commission of-experts appointed by
the conference and whoso work
should begin at a date and place to
be determined by common consent. >
The Russian delegation observes :
that the great obstacle which hlth- i
crto has impeded the work of the j
conference is the fact that tho ideas :
of reciprocity expressed above are
not yet sufficiently shared by all the
Powers; but the Russian delegation
must not fail also to emphasize the
fact that tho pourparlers which
have taken place have ripened the
way to a rapprochement between
Illioain >V>a *n? rnrnicrn TVMtr.
The Russian delegation expresses i
the opinion that the differences aris- ,
ing in the solution of the financial
Issues between Russia and the for- '
eign Powers ought not to constitute j
an obstacle to the solution of other j
probhuns which can and ought to be ,
solved here?problems interesting all i
countries, especially problems in- j
volved in the economic reconstruc- i
tion of Europe and Russia and the
consolidation of peace.
Russia came to the conference
with a conciliatory purpose and
hopes still that her efforts In this
direction will he crowned with success.
One passage of the preamble says:
Tnstead of credit. l>eing accorded i
lo the Russian Government the Allies
enumerate credits which the
various Government!) are ready to
grant to those of their citizens who I
may wish to trade with Russia. But J
this question, interesting as it may
be for the individual merchant of ,
other countries, has nothing to do I
witn tne question raiseu oy me uus- j
slan delegation. These very mer- |
chants ami industrialists will not be |
able to utilise credits to the extent
desired unless the Russian Government
is assured of the financial
means necessary to revise the productive
forces of the country?a
condition Indispensable to the existence
of commercial relations of
any magnitude between Rnpsia and
otiier States.
Discussing whether Russia is responsible
for the damage to property
in Russia of foreigners, the reply says;
Revolution, being assimilated like
all great popular movements to the !
category of a force majeure, does |
not confer title to indemnity upon |
the sufferers therefrom. When for- |
ofgn citizens, supported by their
Jovernments, demanded the Czar's !
Government to reimburse losses to i
them by the revolutionary events of
1905 and 190(5, the Russian Government
rejected the demands, basing I
Its refusal on the fact that, not hav- (
. mi i V
[ '
ing accorded damages to its own
subjects for similur losses, it could
not place foreigners in a privileged
With reference to clause 1 of th<:
memorandum, the reply says:
The uiemorandum of the Allies
demands Russia "suppress upon
her territory i?U attempts to aid
revolutionary movements in other
countries." Tf by this formula the
memorandum means to prohibit the
activities of political parties or organizations
of workers' the Russian
delegation cannot accept the prohibition,
at least in so tar as'the activities
in question do not transgress
the laws of the country.
in the same clause the memorandum
demands that Russia abstain
from ail action tending to disturb
the political and territorial
status quo in other States. The
Russian delegation considers this
demand a veiled attempt to make
Russia recognize treaties concluded
by other States. But that is a political
question which Russia is
ready to discuss at the proper moment
with the Powers involved.
Another political question introduced
in the memorandum is that of
the relations between Rumania and
Russia, indicated in clause 13. As
this question is part of the totality
of questions, political, territorial and
otherwise, at issue between Russia
and Rumania it cannot be examined
Discussing the financial clause, the
rftttlv. xifter rftmnrkinff iho lTnifo<1
.States repudiated treaties of its predecessors,
Knglaml and Spain, says:
The Governments of victorious
States did not hesitate during the
war, ami especially at the conclusion
cf the treaties of pence, to seize the
property of subjects of the vanquished
States situated in their territory.
even in foreign territory.
Conformably with these precedents
Russia cannot be obliged to assume
any responsibility whatever toward
foreign Powers and their citizens for
annulment of public debts and the
nationalization of private property.
Replying to Clause VII. of the
memorandum, the Russian says:
The pourparlers have been rendered
nioro difficult still by the obstinacy
of certain States in imposing
upon Russia, through Article'
VII., obligations conflicting with
her sociul system and with Article
A of the Cannes resolutions.
sacrificed a great number of foreign
capitalists desiring to profit by the
facilities and guaranties offered to
them by the Russian Government
in order to return and work in Russia.
and they have sacrificed, as well,
the interests of n multitude of small
holders of Russian bonds and small
foreign proprietors whose property
hns l>eon nationalized or sequestrated,
and whom the Russian Government
had intended to include
among those the Justice and merit
of whose claims sho recognized.
The Russian delegation cannot refrain
from expressing surprise that
Powers like Franco, which in-ludes
the majority of the small holders of
Russian bonds, has insisted most
upon the restitution of property,
thus subordinating the Interests of
the small holders of Russian bonds
to those of certain groups who demand
this restitution of property. *
The sovereignty of the Russian
Stale becomes the plaything of
chance; It can be defeated by the
decisions of a mixed court of arbitration
composed of four foreigners
and one Russian, which will decide
in the Inst instance whether the interests
of foreigners are to be subject
to restoration, restitution or Indemnification.
Japan, It was slated to-day, has
loinod forces with France In her delerrn(nation
not to indulge in protracted
negotiations with the Russians.
Clause VII. begins with a beautiful
preamble, recognizing the sovereign
right of Russia to organize
witlihi her own territory her regime
of property, her economic system
and her Government, but the text
of the clause itself is in flagrant
contradiction with the preamble.
On this subject the Russian delegation
must call attention to the
fact that in trial cases of this kind
specific disagreements will inevitably
end in bringing into opposition
the two forms of property
whose antagonism is taking to-day
for the first time in history a real
and practical character. In Buch
circumstances there can be no
question of an impartial superarbiter,
as according to the sense of
Clause VII. the iolc of superarbitev
would inevitably be filled by the
other interested party, which would
lead fatally to the intervention of
foreigners in the internal affairs of
"Russia, and would be tantamount
to the abolition in practice of the
inviolability reti"6gnizerl 'at the beginning
of Clause VII. of the regime
of property existing in Russia.
Furthermore, the Russi.tn delegation
denies that Clause VII. has any
practical character. Its presence in
the memorandum can be explained
only as the result of a desire to satisfy
a certain resentment of class
or party, and not by any means as a
result of an adequate knowledge of
the state of things in Russia, to say
nothing of the perpetual conflilts to
which It would give rise between the
claimants and the Russian Government
and between the Russian Government
and the foreign Powers.
Clause VII., far from treating between
the Soviet regime and the
capitalistic regime that mutual tolerance
which is the condition of
fruitful collaboration, would only
tend to poison their relations. The
foreigners who went into Russia.,
not in consequence of a friendly
agreement with the Russian Government
in order to work under the
protection of Russian laws, bi^t in
virtue of the decisions of a mixed
court of arbitration, would soon feel
a general hostility toward them.
The Russian Government on Its
part, in order to enable the former
owners of nationalized property to
apply their technical knowledge and
capital to the economic revival of
Russia for their own advantage, has
recognized in them in preferential
right in every case where their former
property is to he let as a concession,
whether under Iho form of
a lease, a mixed company formed by
the State and the foreign capital, or
under any other form providing for
the participation of foreigners.
The Russian delegation further
observes that interested States, in
reserving all their solicitude for a
restricted group of foreign capitalists,
and in manifesting an Inexplicable
intranslgeant doctrine, hnvn
Maurice Colrat, Under Sec
in Statement to 'New Y<
Charge That Nation
i* 11
oi tne
t special Cable lo The Mew Yoex IIekai.h. Cc
Genoa, May 11.?The economic I
relations between tho Genoa confer
printed iiiy.THK New York Herali- at
attracted no little attention here. 3
tary of State in the Ministry of Fo
tipn at the Genoa conference, has
Hebai.d to publish the following i
"France is losing the sympathy of
every nation. And if France Joses the
world's sympathy her own fate is
sealed," writes Sir George Paislv.
France does not want to lose the
world's sympathy. She feels that if
the world's sympathy is drifting from
her, such statements as that of Sir
George Paish are not a little responsi- j
ble for it. And what strikes her most j
in these statements is that confusion j
is hardly to be expected in men of Sir j
George's standing and-ability.
The reconstruction of Europe has j
i been so much talked about that peo1
plo apparently have ceased to realize,
; or never realized, what it means. Euj
rope, no doubt, is a single economic
j unit, in just the same sense as the
I wnoie woria is now a single economic :
unit. None the less, i^ is suffering I
! witb a variety of ills that by no means '
affect every one of its component |
! parts in the same way or in the same j
All Commerce Affected.
Of the economic consequences of
the war, the only one which may be
experienced practically everywhere is
the stagnation of trade, which is due
to the fact that work for more than
four years was either stopped or
turned into unproductive channels;
that wages have risen owing to the
| scarcity of labor; that costs of pro'
duction have gone up and the cost of
living along with them, while savings
and investments are fast vanishing
| away; money is depreciating and taxation
is growing more burdensome;
j hence the reduced purchasing power
! of the public all round,
i This is made worse by the unj
balancing of exchange, both as regards
[ the exporting power of countries with
a ?aiur: v; u 11 vuvjjr aiiu me impgri- J
j ir.g power of countries with a low1
j value currency.
Another economic consequence of |
' the war more exclusively concerns j
Europe: Traditional trade currents'
been broken by the territorial
i rearrangements as defined by the vari[
ous peace treaties.
i A centrifugal process took place
j about the time of the armistice, be
'< fore any treaty was drafted?a whole
j province broke away from Austrja!
Hungary and is now a part of the
j new independent States, Jugp-Slavia,
j Czecho-Slovakin. and Poland. This
I could not be done without snapping
j the old bonds, economic as well as po-'
' lltical. and upsetting the old connec|
Cites Caw of Poland.
Nothing illustrates the position betj
tor than the case of Poland's agricul!
tural districts, which, when under the
| Russian crown, used to supply in.
dustriai Geti many with foodstuffs
wrhile getting industrial products from* j
I Germany: whereas the industrial dis- i
' tricts of Poland used to gej food from '
Russia and export manufactured artides
into Russia, the Galician district, |
j rich in oil. doing most of its trade with j
j Austria, to which it beloxiged. Now,
will any of these three pails find in
the other two markets the sources of
j supply it requires? This i ; more or
less the problem of every Kuropean
territory that has changed hands since
the war- It is no doubt a serious probj
lem, yet that is no reason why treaties
| should be revised and peoples denied
the right of freely disposing of them
The th)rd economic consequence of |
the war 'is even more narrowly confined.
The particular stretches of I
countries which have been the scene I
of the heaviest and stubbornest fight- j
, ing are eastern ITuasia, Poland,^Oa- ,
i lioin, Rumania, the adjoining parts of j
Russia, .Serbia, the Balkans and north- !
; eastern Italy, and. Inst but not least,
I France and Belgium, where trench
warfare went on for practically four
years in the same spot, where towns
and villages were wiped out of exist-1
I enre and recognition by artillery fire.1
j where the vegetable mold itself was
blown to dust, or buried many feet.
- - -< ~ nl.nllr
tying unaor wj ? >"
Xor is this al*. Apart from the inevitable
blight of shellflre. willful and
systematic destruction was carried out
?for Instance, during the G^iman retreat
of 1917 in the Homme, where the
very fruit trees were cut down.
Iliplalns Bor?P?'? Problem.
France especially tfor to tbo last the i
Germans hoped to retain possession of |
Belgium) was the victim of an economic
vrsr simultaneously waged according
to the plan that all coal mines,
steel works and factories whose competition
might eventually have murdered
Oerfnany's commercial expansion
should be stripped, flooded or destroyed?In
the busiest and n.ost industrial
part of the French provinces,
which not inaptly have been described
as the combined TJincashlrr and Yorkshire
midlands country of France.
How misleading it would be to fancy
that "remedial measures" will be ths
same in every case, that a single formula
can solve the problem rf "Kuropean
reconstruction;" This problem,
as we have seen, includes th-ee very
different elements, the cumulative effects
of which make thcmse.ves felt
only In a very few cases; the purchasing
power? of most countries In thi
world has lo be restored, trade cur
retary of State, Gives Data:
3rk Herald,' as Reply to
Is Losing Sympathy
10ft, btj The Ntw Toit Ushalo.
treatises by Sir George Paish on the '
ence and reconstruction of Europe,
id cabled back from New York, have
daurice Colrat, French Under Secrereign
Affairs and one of the delega- j
.kindly authorized The New Yokk
emarks in answer to the English"
? '
rents have to be brought back into formcr
channels or find new ones, actual
devastation has to be made good and
the means of production restored.
Sir George Palsh talks of "homes
and farms to be rebuilt, factories reconstructed,
railways repaired and reequippedr
mines and oil wells reopened
and everything done to render injured
peoples again self-supporting."
All this no doubt is true. But Ut ia (
not true of Europe In general. ^
Helping' France Helps Kurope.
In the words of President Mlllerand:
"France does not intend to sacrifice
the reconstruction of Europe to its
own reconstruction, but believes she
is right in thinking, without egoism
or injustice, that the reconstruction
of her own devastated areas, which
served as a rampart for the armies of
civilization, is an essential part of the
reconstruction of Europe."
Why Sir George Palsh should assert
that such remedial measures as
he enumerates havo not been taken,
that "three and a half years after the
great war ended the nations have met
together to consider what steps should
be taken to repair the destruction
o^iused by the war," the Frenchman is
rather at a loss to understand. '
If, as we strongly believe, individual I
effort is the only key to collective im- (
provement; if this world crisis is not
brought to an end after all except by '
making fresh money and saving it
for further productive undertakings. {
Fance cetainly has not failed in its
duty in the last three or four years. (
and everything she could do toward i
rebuilding the devastated area she has j
In May. 19i!l. a party of British ex- *
service men mot in that part of c
France where they had borne the
brunt of the German attack in April, 1
lOIP nni ..j ... -
j wf nimiJiy couia noi recognise
the place.
Such tales are everywhere. Most of
the land has been cleared of barbed
wire, grenades and shells and is under
cultivation once more. Roads have
been repaired, bridges rebuilt, railways
relaid, mills and factories reerected.'mines
pumped dry apd timbered
and set to working again*'""'M'ieV
Coats by Taxation.
The December, 1921, production already
amounted 'to 37 per cent, of the
1913 monthly output, and amounts to
62 per cent, of the Xord district. For
the whole of 1921 the combined production
of both lielda stood at 6,000,000
tons, as against 19,000,000 in 1918.
Meanwhile, housing and accommodation
are being provided for the miners.
The cost so far has been met partly
by taxation, chiefly by internal loans.
X. Dean Jays, Bankers Trust Company,
New York, will supply American
readers with all the needful particulars.
During the years 1919, 1920 and 1921
approximately 60.000,000,000 francs
were spent for reconstruction and pensions
to soldiers' widows and disabled
and interest on loans issued for both
purposes. Another 20,000,000,000 francs
will have to be found soon, nor will
tliat bo the end.
Of course the French budget, with
taxation averaging more thun 500
francs a head of 40,000.000 population,
and nothing coming from the dev- 11
ustatcd provinces, which contributed 1
9E ? ? I'
come, cannot possibly be balanced un-) r
less the interest on these huge loans ' p
In provided by the annual installments ] i
of the indemnity due from Germany. ' p
Sir George Paish gasps at the enor- H
mous figures. They have not 1>een of P
our making any more than of our p
choosing. Reparations aro no arV?i- *
trary invention of purs. y
As regards "keeping our debtor r
eternally in Jail,'' thin indeed is a fig- *
ure of speech with nothing behind it. J
As regards "the sums he can and will (
willingly pay," we shrewdly guess l
that lie would name a very small one *
Indeed, having so fur shown no *Vi- *
donee in ills financial arrangements J
that he ever intends to pay nt all. If 1 f
he can possibly help it. ! u
"Apart from material and supplies !
handed over by Germany vor the i *
satisfaction of demands upon her soon J
after peace was .concluded Oormany
has mudo no reparation payments,"
Sir George Paish; rightly observes.
Now, within the two or throe years
that followed the war of 1870 France a
had managed to collect and pay an in- r
demnity of 5 000,000.000 francs, We
quite agree with the April 30 |
editorial in The Xbw York Ukrai.d,
that "the man jabo pays h.s obliga
tions in full is hold in high esteem toy
his fellow men as an honest man; and
the man who tukoB advantage of the
bankruptcy laws to release him from
debt is held^n contempt by his fellow
men. This is as true of governments
as of men.-' ?
The question may be asked whether
bankrupt Germany has reestablished
herself. We hold that her bankruptcy
Is ot*a, financial rather than of an
economic nature, and chiefly due to a
peculiar method of balancing accounts.
Without impllcity trusting in the
"liberal and pacific republican Germany,"
which Hir George Is pleased to
assure us the world would 110 more
permit to conquer us than It allowed
monarchist GeVmnny. tt is a fact that
we do not "mind in the least how the
money is raised, so long as the installments
are paid " And we should
welcome any suggestion that might
enable Germany to raise it.
Would to God the damage done had
been ntore "reasonable," thus making
the reparations as reasonable us Sir
George Palsh himself ever could have ,
wished* 1
" i
Would Reduce (jold Values
to Meet Higher Purchas- j
ing Power.
. ... j
Exchange Should Be Determined
by Prices After
v Blockade Was Raised.
- . . i
' J
Believe* Germany Cannot He- !
deem Paper at Higher Than i
3 Per Cent.
__________ i
Sprcial Cattle to Tn? New Yo?k Hmami.
"onrrlght, 19lt, by Til* N*w Tome Hbtald.
New Yark Herald Bureau, )
Berlin. Mar 11. ( t
Oscar T. Crosby, former Assist- i
ant Secretary of the United States f
Treasury, who has been making a J
survey of economic and financial t
conditions in Germany for the last <
two months to obtain data for the '
benefit of the. United States Gov- J
eminent and American, bankers,
has given to The New York Herald
an outline of the course necessary,
in his estimation, to solve ]
Germany's fiscal difficulties and assure
her return to nonnal.
A possible course for the redemption
jf German currency is calculated on
iho following:' assumptions?perhaps
the only ones giving: a reasonable
FmsT?The purchasing power of
rold has been abnormally low through)Ut
the world while Germany's postwar
inflation was taking place. Thereore,
the gold values to be fixed should
>o reduced about one-half in order to
correspond with the higher purchasing
>owor of gold, which is now being esablished,
and which would oe availible
to the holders of paper marks in
:ase of their redemption.
Bbcoxd?For the internal mark ex- j
icnditures by the German Govern- '
nent, the index figures after July, j
L919, when commerce was freed of
dockade restrictions, shall be taken
is a guide to their real values as releived
by the Government. Wagos in .
Jermany are fixed according to these j
ndex numbers.
Third?For external mark expemllures,
exchange rates shall be simi- 1
arly computed. These principles ap(lied
to the whole outstanding note is;uo
as of April, 1922, give a redemp
ion vulue of about 1-30 of the nominal ~
raluc, or about 4-3 of a cent per paper
nark, or about 325 marks to the
Thus, combined, the rate is higher
hun that which would be determined by
ipplylng to the whole* issue the amount
eeelved by the German Government for
he paper marks sold to provide the initalments
of 1,000,000.000 marks gold
equlred last year by the London ultinatum.
In meeting that requirement
ho Government was aolc to realize
?nly about one-fortieth of the nominal
/alue for many billions of paper marks.,
Ratio to Dollar. |
That would mean three-fifths of a
evit ]>er mark, or 166 marks to the
lollar. Tt Is not possible to apply the
irinrlplri of the established value reelved
to the paper mark Inflation durng
the war, as all prices, and hence all
ndex numbers, mere artificially determined.
If the published figures for this
erlod were included with the post-war
ate the redemption value would be
ilaoed upon an impossibly high basis,
loreover, the long duration of an apiroxlmately
constant purchasing power
ermitted the holders of paper marks to
scape serious loss during that i?eriod.
From what precedes, I tlnnk it may
>o assumed that Germany iwvcr will
edeeni her paper marks on a higher
told value than about 3 per cent, of |
heir face value. Nor is this rate likely | r
o br* adopted. It la more probable that j
lertnany win only go nignrr uian me i ?
owent rate that liaa obtained. or she v
rill be forced by reparation claims to ! t:
acriflce lior currency in obtaining for- ] u
ilgn gold valuta. \Vhen pnper issues 1
equlre astronomical figures for their !
ixpresalon, the redemption values prob- ' ?
ibly will Uicomo microscopic.
I do not liellcvc the tlnnl declaioh ot,?
i. redemption rate will be much nflcctod 1
>y foar of ;v charge of repudiation. H
Antral and eastern Europe can 0
cnrcely afford the luxury of nice ills- 11
inctiona between such terms as defla- h
ion and repudiation. j -1
Furthermore, any ultimate value* b
idoptcd cannot ho made the immediate T
rdemptlou value, if It Is 'considerably 1<
We have placed sii
in mortgages?a
$141*000 for eacl
Wm. A. Wh
46 Cedar
T !. JohA
m t<lj
higher than the ruling rate of exchange
when the system of redemption begins
to operate. Then the ultimate value
may be reached at the end of a period
during which small increments of the
value to be provided ror in auvanoe
would be given ?very year to the redemption
of outstanding notes. Kventually
these should be taken up by internal
taxation, while netv notes, based
on gold and commodities, gradually
would lead the country back to the
sound system which we have largely
copied in our Federal Reserve operations.
Whether Germany can make a showing
of foreign and Internal conditions i
good enough to warrant foreigners
sending In money for the resumption
specie payments remains to be seen.
The Reparations Commission and the
general state of Germany's international
trade must be consulted.
Loan Talk Called Speculation,
Meanwhile loose talk of a great loan I
Is only fanning the flames of specula- I
tion. On many sides in Oermany, even |
In Frank A. Vanderllp's articles, one >
bears it said that "Germany ha? un i
unfavorable balance of trade. She must .
Iherefore have a loan." In other words, j |
if a belt Is too short for the emaciated j
body of foreign trade It must be made
Lo go around that body when stuffed out
by the Interest on an external ioun.
But. bow? .
One resourco remains available,
namely, the amount of money?thought
to be very large?wljich the Germans
liave been able to hid"? in foreign bank."
Like other people, they try to escape
taxation. And there 13 another powerful
motive?to put their wwaHli into
moro stable communities than their
?wn. If their Government would try
in Internal loan free of the enormous
burdens now laid upon Internal possesdons.
It is probahlie that a considerable
lum might thus be obtained.
Tax redemption Is bad enou.-b. but
.here ere in this situation othe? things
vorse. It does not seem to me t!at any
lettlement that leaves a shortage of de'erred
claims in the hands of ti.e Repa'atlons
Commission can v? nc,:t ptxble
o prospective lenders, as consist'-Jit with j
he saf< ty of their loan, vnlcss ."JCh a
daim should bo distinctly 'elega < ' to a
late la'er than that of the maruiity of
die loan.
A recent proposal emanating from
English sources in Genoa outlines a plan
by which it is illogically thought to
liminish Germany's payments to France,
provided the United States cancel our
claims against the Allies. AVe may.
Indeed, recognise the Inability of our
found that the external claims upbn
3ermany cannot be met. But the first
step is * to see European debtors and
creditors agree as to what Germany can
ind shall pay.
In this connection, T nope the United :
States- Government, at an early date, i
will give our Allied Debt Commiesion !
much larger liberty of negotiation than
t now enjoys. The statutory time for j
payment, recently fixed by Congress, is j
oo short: the interest rate, for the oar- j
ier years at least, too high.
1 see.tha*""31r. Frank Vunderlip places '
treat hopes on the results of the confer- j
-net! of the heads of note Issuing banks j
:ooii to be held in London. It is under- j
itood that Mr. Benjamin Strong will j
ilso attend. Iiis selection is Tan excel- !
ent one. But what can be done there''.
The uniformity of discount, or unfixed
ratio between the discount rales
n different countries, is absurd. Any form
>f mutual economic balance except such
is Is based upon the commodities entertng
.1. t tT-..a? nna n,l,lnh
hcreforo are now commonly Involved II
ii the current acceptance of business, II
h equally out of the question. Until ||
he reparations question between Oer- ||
nany and France is settled each ?
:ountry must keep its own affairs in g
ts own hands, for better or for worse. ^
7 ranee to Stay Until Parley Is
Wrecked or Abandoned.
Nprcial Cable to Tub New York Hkilud.
'opirright, 19(5, bv Tu* New York IImlu u
New Y?rk Herald Hnreau, 1
Pari*. May 11. t |
So far as France is concerned, the ,
itility of the Genoa conference Is "
mded, and although France will not '
)itrticlputc In further discussions with '
he Russians, she will remain at Genoa '
mtil the conference is disrupted or dls- I
landed. Slueh is Premier Poinoaro's at- J
dtude on the Russian reply to the al- f
led memorandum. I
After reading the preliminary dis- >
latches, the Premier declared to-night j
hat he could see no further possibility j
'or good out of the conference, adding: c
"Tf a rupture comes ten or fifteen days *"
lence. it will be even more pltiuble than ?
f it should come now." ] f,
The only satisfaction obtained at | m
lenou. as far as the French can see, j
? the corelation of financial uml econo- Q
Tile ideas of other countries, plus new
jvldence of Germany's bad faith, as
ihown by the Rapullo treaty concluded
iVlth Soviet Russia. <i
Pxnis, May 11 (Associated Press).? |
rhat the French delegation at Genoa houhl
no longer discuss the Russian
luestion is tho opinion freely expressed
n Parliamentary circles here to-night,
t is pointed out that tho Russian answer
onfitltutes a negation or the Cannes j
irogram and also tho conditions under
vhich the Hordet delegates were adnitted
to Genoa.
While no Immediate necessity Is s/tn
or tho termination of the conference In
lew of other questions pending, It Ih not
sslteved that France will participate In
.ny new conference.
Genoa, May 11 (Associated Press).? I
It is less an answer than an Indictment
f the Powers, coupled frith a flat refusal
o reply to the questions put to them,"
aid !M. Rarthou to-jjiglit In commenting
n the Soviet v^ply. He made this rcnark
as he wA^nterlng his hotel, where j
10 gave a dinner to-night In honor of th# i
mnrlran Ambassador. Richard Wash- >
urn ChlM: fvlgrnor Mehanier. Baron
fayanhl, Viscount Ishll and other allied
?aders. ,
ice January first
in average of
1 working day.
lite & Son*
\ .? V
On Frida^jAugust 3rd? 1492,
Columbu? set sail from Spair,
on his memorable voyage, ;
And on Friday, October 12 A j
1492, he discovered the'
shores of the New World;
Truly, Friday is a lucky day'
for those who voyage and *
discover, j
Especially if they voyage tcj
CH1LDS and discover the'
delicious fish cakes served*
on that day? *
T?m|NiHlr browned, end
served with tomato sauce
and spaghetti. >
s-/7 0.:Pdb
Kew Gardens Inn is a complete
home. . . . Where
the charm and privacy of ,!
suburban life are delight- j
fully blended with the con- <
venier.ces of a modern city 1
apartment. . . . Tennis
courts on the grounds. ...
A park for the children. ... t
Golf clubs nearby. ... 18
minutes from New York
. . . And a tariff schedule
that is considerably lower
than you might expect.
Come Yourself, and see
t 4 Dim? i
I .uwi i jitiiuuiuy incuis
Bachelor Itoom M5 Weekly
Nlngle Room, with Bath. 35 Weekly
Double Room, wltli Hath.
iMrnh for two) 33 Weekly
Two Room*, with Uutlt.
(Meals for two) 73 Weekly
KEw Gardens
I_ (^Kew Garden "
^ Longjsland , if
1 to A Room Apu Knott N*nag?m#ntTOto
H. Ufartmmn. Mqr. PhorWl 3692
>u,c a'c?h?l renoved
from e?<jh
Made to Measure
Made to Measurp
Ready to Wear
U^-no springs, and <
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^ '~7lie marvelous #
Th* rmmtmin P*n ?Wih ,hm UttU Hml ftaHfi JUtiufl*

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