Reparations Report

Upon the S. S. Leviathan, steaming toward the U. S. last week, came a tall slender man with brown hair, blue-gray eyes, and a wise, constructive reticence. Safe on the high seas from reporters, Seymour Parker Gilbert lazed and rested from his labors as Agent General of Reparations although the duty of his steady mind is to keep the fiscal balance of a continent, there danced in his head, last week, jocund plans for Christmas at his home and birthplace, Bloomfield, N. J. Old college chums from Rutgers and Harvard Law would make merry with him. He would tower in Manhattan among financiers, and in Washington above those who were his associates when he was a Treasury "career man." Best of all, wise Agent Gilbert had contrived that he should be snug aboard the Leviathan, last week, when the Reparations Bureau released at Berlin his 237-page printed report on the third reparations annuity year (Sept. 1, 1926, to Aug. 31, 1927). Theses. As usual, the Agent General put forward in his report several explicit theses. This year they are that:

I. The present so-called "Dawes Plan" -- which specifies the annual pay ments to be made by Germany without stating how long they are to continue -- must soon be definitized by some sort of agreement as to the total sum which Germany is expected to pay. Wrote Mr. Gilbert: "As time goes on and practical experience accumulates, it becomes always clearer that neither the reparations problem nor the other problems depending thereon will be finally solved until Germany has been given a definite task to perform on her own responsibility, without foreign supervision and without the transfer problem." The modest Agent Gilbert envisioned and recommended the proximate abolition of the very bureau over which he presides.

II. German prosperity is now general and increasing. Business failures are less numerous by half than in 1913. Unemployment has been reduced to 965,000 and is no longer a serious problem. Production is high in the coal, metal, textile and other key industries. The currency of the Republic is absolutely sound.

III. The most ominous German trend, from the standpoint of reparations, continues to be the large foreign loans being made to German states and municipalities. Over 3,950,000,000 gold marks ($940,100,000) of such liabilities are outstanding, and the funds which they represent have produced conditions bordering on "boom prosperity" in some areas. Agent Gilbert sternly warned that under Article 248 of the Treaty of Versailles the repayment of such loans is made secondary to and contingent upon the prompt payment of reparations. He concluded: "The States and communes have played a major part in the gen eral tendency toward spending in excess of resources which has recently characterized public finance in Germany."

Prompt Payments. The report declares that all sums owed by Germany under the Dawes Plan in the third reparations year have been promptly paid as follows to creditor nations: Marks Dollars (approximate) France 766,998,000 174,000,000 British Empire 306,996,000 75,800,000 Italy 107,458,000 25,880,000 Belgium 97,244,000 23,280,000 Jugoslavia 54,277,000 12,960,000 Rumania 12,500,000 2,900,000 Japan 13,000,000 3,120,000 Portugal 8,000,000 1,920,000 Greece 4,000,000 960,000 Poland 304,000 72,960

The sum of 99,000,000 gold marks (some $23,760,000) was further paid to the U. S., part of this amount having been carried forward from the second reparations year.