Germany's Standstill Credits As was expected, Germany's foreign creditors returned
defeated this week from their attempt to wring more favour- able terms out of Dr. Schacht. The contest was necessarily unequal because the German Government identifies itself, for very good reasons, with the debtors' committee, while the foreign creditors can depend on no Government support. The argument that Germany's large foreign surplus could be used in part to make capital repayments of the debt was countered by the assertion that the surplus provided no foreign exchange because it arose out of barter transactions ; the virtuosity of Dr. Schacht's financial and commercial methods is well exemplified by this argument. Thus the Standstill Agreement, with only minor modifications, is renewed for another year ; the creditors' only method of securing payment is in registered marks involving heavy capital losses. The history of Germany's short-term debts is little calculated to encourage further loans to her. But the true, and distasteful, significance of these negotiations is that they perpetuate an arrangement under which British and other banks continue, willy-nilly, to lend to Germany over L40,003,000, which is used to finance rearmament.
* * * *
Previous page
