A Grand Compromise

The suggestion of Premier Poincare of France for the formation of two committees of experts to examine the vexing question of German finances, made to the Reparations Commission early this month (TIME, Dec. 10) at last bore fruit.

The Allies, having sunk their differences by compromise, called upon M. Louis Barthou, Chairman of the Reparations Commissions, to invite the U. S. Government to send experts to sit on each of the two commissions of inquiry. M. Barthou wrote to Colonel James A. Logan, U. S. observer on the Reparations Commission, giving him further information required by U. S. Secretary of State Charles E. Hughes:

My dear Mr. Logan:

. . . In order to give you more definite information and to clear up points which might leave doubts in your mind, we desire to furnish you with more precise details.

The First Committee of Experts will endeavor to find: a) the means of balancing the budget; b) the measures to be taken to stabilize the currency. Concerning the stabilization of the currency, the experts would be invited first of all to determine the conditions to be realized in order that a currency could be stabilized and then the measures to be progressively taken so as to realize all of these conditions.

As the stabilization of the currency necessitates budget equilibrium, the experts would similarly be invited to study in detail the receipts and the expenditures of the Reich as well as of the different States.

The Reparation Commission would ask the experts to give it in all sincerity their professional opinion on the questions submitted to them.

I hope that it may lead your Government to acquiesce in the acceptance of invitations by American experts to participate in the labors of the committees. Furthermore, if you accept this suggestion, I am quite prepared to submit it to the Reparation Commission.

(Signed) LOUIS BARTHOU

Colonel Logan replied:

. . It has been made clear in our interviews that the Government of the United States is not in a position to be represented on these committees, but my Government believes that the proposed inquiries will be of great value, and it views with favor the acceptance by American experts of invitations ; to participate in the work of the commit; tees. . . .

(Signed) JAMES A. LOGAN

The German Government, through Dr. Otto Wiedfeldt, German Ambassador to the U. S., agreed to the arrangement proposed by the Reparations Commission:

The Honorable, the Secretary of State, Washington, D. C.:

Mr. Secretary of State:

Under instructions received from my Government, I have the honor to inform Your Excellency as follows:

The Reparation Commission having decided to appoint two commissions, of which one to examine German capital abroad and the other the financial situation and currency conditions of Germany, the German Government is of the opinion that through the proceedings in the latter commission important progress could be made toward the solution of the problems underlying economic recovery. My Government holds the views that this aim can only be achieved if the United States cooperates in said commission.

It would, therefore, be much appreciated by my Government if the Government of the United States were to agree to the participation of an American expert in said commission. . . .

(Signed) OTTO WIEDFELDT The U. S. Government had therefore concurred in the general compromise which had resulted in achieving unity of purpose among the Allies.

It would appear, moreover, that the U. S., having sealed the arrangement with mark of its unofficial approbation, will be morally bound to see that the recommendations of the Committees are made operative. This view is strengthened if the Committee, which is to investigate finances in Germany, recommends an international gold loan for the country, as it is almost certain to do. In this case, a large part of the loan will have to be raised in the U. S. and, in order to protect herself, it seems inevitable that the U. S. Government will have to be represented on the body which administers the assets securing the loan. The Reparations Commission invited Charles G. Dawes and Owen D. Young to serve as the unofficial U. S. representatives on the Committee which is to attend to the German budget and currency. (See NATIONAL AFFAIRS, page 2.)

Meanwhile, British and American opinion condemned as impracticable the committee which is to inquire into German finances outside the Reich. France, however, places all her hopes in getting a grasp on exported German capital and believes that any inquiry into German finances within the Reich is impracticable.