THE REPARATIONS.
IT would be necessary, we should think, to penetrate into some very remote district where political ideas do not circulate freely to discover a person who still believes that it will be possible to pay huge lumps of Debt, and to reconstruct our industries, out of German indem- nities. The tendency among those who think about these matters is at the moment rather to wonder whether Germany will be able to go on paying at all. It is true that the Reparation Commission reported that Germany would be able to pay the instalments due next January and February, but it is extremely doubtful whether it will be desirable to press Germany to make these payments even if formally she can do so. It is useless to bring about the collapse of a country with which you simply must do business. France alone among the Powers seems to be able to convince herself that Germany is an El Dorado, and that the downward swoop of the mark is devised to impose upon nincompoops and to get German excuses for non-payment accepted. In the previous article we have described some French grievances against Britain. But we may mention here yet another grievance, which is that the schemes for helping Germany attributed to the British Government would throw the French Budget into chaos.
Perhaps France believes against belief, so to speak, that Germany can go on paying without industrial ruin because the French Budget does really depend upon the repara- tions. It is one of the strangest paradoxes of our genera- tion that a very large number of Frenchmen wish at the same time both to keep Germany in a state of im- potence and to extract from her enormous payments. The two things are, of course, incompatible.
We shall not attempt to pick and choose between the rumours which circulate freely about the visits of Herr Rathenau and Herr Stinnes to London. We dare say that lieu Stinnes has proposed some scheme for reviving Russian trade which is quite worth consideration. We dare say also that Herr Rathenau has suggested a loan— a loan from the creditor in order that the debtor may pay is a notion quite worthy to be put beside the record of the young nobleman who " squandered an enormous fortune in paying his debts"! All the rumours are mere symptoms of the tangle into which we have got. If it is not true that a moratorium or a loan has been proposed it ought to be. Germany is not in the least likely to recover while large sums become due at regular intervals and leave her with insufficient capital to develop her enter- prises. A moratorium for two or three years or a loan would give her a chance. We should then see how she was going on and we should be able to judge of the prospects. For our part we feel so strongly that inter- national trade—the lack of which amounts to universal stagnation—is by far the most important object for us to aim at that we should not object to the wiping of all the reparations off the slate if we were quite sure that it is the reparations that are primarily standing in the way of recovery. A moratorium or a loan would, as we have said, enable us to judge. We sincerely hope that something will be arranged. Some of the schemes proposed for enabling Germany to pay without causing a further slump in the mark are very interesting ; for instance, the suggestions laid before the Federation of British Industries that payment should he made in kind, that mortgages should be accepted on German enterprises, and that in place of money payments German labour should be set to work to reconstruct industry in Russia and China. Unfortunately, there has already been an unhappy experience of payment in kind under the arrangement between France and Germany concluded by Herr Rathenau and M. Loucheur at Wies- baden. Payments in kind are quite reconcilable with a continued slump in the currency. The reason is that a Government cannot send out goods as payment until it has itself paid for the goods. It has to obtain somehow the means of paying, and in default of other means, such as more taxation, .it inflates an inflated currency. The groaning printing presses are set to work harder than ever been very curious recent development in Germany has ueen the power which certain industrial magnates have gathered into their hands. In effect, they hold a pistol to the head of the Government and demand that for the good of the nation they should be allowed to take over such State services as the railways and the Post Office. We must confess to a great deal of sympathy with Herr Stinnes and his fellow magnates. We need not analyse their motives, which for all we know may be selfish or egotistically ambitious to the last degree. The fact is however, that the German Government have raised the railway fares and the postal charges by one step after another and have added considerably to the staffs of both services. Those who know what has happened here—and who does not know to his cost ?—will not be surprised that exactly the same kind of thing has been happening in Germany. As, however, Germany wants money, and wants it quickly, it might be a very good thing for her if she were compelled to hand over to private citizens the management of the railways, though these have long been a source of bureaucratic pride. We do not think that the bloated staffs, and the fares, tending to become prohibitive, would remain very long unchanged under the heavy hand of Herr Stinnes. At all events, there is an exciting duel going on between the Government and those captains of industry who every week seem to become a little more powerful, and we shall watch the result with much interest.
Germany, of course, is afraid that if she does not make the payment due to France in January the Ruhr will once more be occupied. That ought not to be. We mean that it must not happen, in any event, as the result of isolated French action. Surely it is possible to appreciate sufficiently in advance the magnitude of the danger. There ought to be an agreement about reparations and all War debts. With regard to the latter it seems that America is ready to play a part. The guiding principles should be, first, that it is silly to extinguish, or even unduly to hamper, a firm with which you want to trade ; and, secondly, that the re-establishment of confidence, of reasonable certainty in the financial outlook, and of that good will which is at the root of all efficient labour may be more valuable, even reckoned in money's worth, than the reparations themselves.
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