The New Reparations Situation

October 31, 1923
Entire Report
  1. While there appears to be a general expectation that the proposed, commission of experts on reparations will lead to valuable results, notwithstanding the French conditions, the opinion of the best informed observers, outside the State Department, is that such a conference will yield no tangible benefits. This view appears to be shared by Mr. Lloyd George. Secretary Hughes has been urged to refuse American participation under M. Poincare's conditions, but this course is not regarded as likely to be followed by the Secretary of State.

  2. A list of the principal conferences and events leading up to the present reparations situation has already been issued by Editorial Research Reports. The most important of these events, as affecting the present situation, was the acceptance by the German government of the London settlement under protest on May 5, 1921.

  3. Under the London settlement Germany was to pay a reparations debt of 132,000,000,000 gold marks, to which was to be added the Belgian war debt of 4,000,000,000 gold marks, a total of 136,-000,000,000 gold marks. From this sum was to be deducted amounts equal to the payments and deliveries already made (variously estimated at figures running from 8,000,000,000 to 56,500,000,000 gold marks) and the credits for Germany arising out of payments or deliveries by ethers of the Central powers. The term of years during which payments were to be made was not fixed, but it was stipulated that Germany was to pay 2,000,000,000 gold marks annually, plus 26 per cent of her exports.

  4. The principal condition laid down by M. Poincare. In his discussion of Secretary Hughes suggestion is that the proposed commission may not cut the amounts due from Germany under the London settlement. The function of the commission, would thus seem to be limited to advising the Reparations Commission, under which it would serve as a committee, as to the best means of collection. M. Poincare's position is consistent with the French, as opposed to the British opinion that the question is not one of Germany's capacity but of Germany's will to pay.

  5. In the Austrian reparations settlement a moratorium was granted for a period of twenty years and Austria now appears to be on the upgrade. M. Poincare will not permit the application of the moratorium principle in the case of Germany, nor is he likely to order a withdrawal of French troops from the Ruhr. Termination of the Ruhr occupation is looked upon by British officials as a condition precedent to European recovery.

  6. From Paris it has been suggested that J. P. Morgan and Eli

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