Young Plan

The problem of how much Germany shall pay in reparations -incomparably the greatest fiscal issue of the age -seemed in a fair way to be solved last week by a one-time plowboy from Van Hornesville, N. Y., and a son of a Danish mechanic who used to repair typewriters in an upstate New York town.

Back in the Sober Seventies the typewriter tinker was a faithful reader of The Weekly Tribune founded by Editor Horace Greeley. Years after he left New York state and moved across the Atlantic to settle in Tinglev, Schleswig, the Danish mechanic remembered the great U. S. editor. When he begat a son in Tinglev, he named the man-child -today chief of the German delegation in Paris -Hjalmar Horace Greeley Schacht. The onetime plowboy was. of course, General Electric's Owen D. Young, chief negotiant for the U. S. in Paris, chairman of the Second Dawes Committee.

A fortnight ago all negotiations were abruptly broken off and the committee prepared to disband (TIME, April 29), after a demand upon Germany for 28 billion dollars over 58 years was met by Dr. Schacht with an absolute refusal to pay more than 15 billions over 37 years. The Allies were particularly incensed by the fact that Germany's "Iron Man" made a portion of his offer conditional upon the return to the Fatherland of certain territory and colonies which she gave up by ratifying the Treaty of Versailles. Blamed by all the Allied delegates for dynamiting the committee, stubborn Dr. Schacht left Paris for a five-day visit to Berlin.

During that black interlude, and while Dr. Schacht was telling German correspondents that further negotiations would be useless, an entire new plan was drafted in Paris by Chairman Young, working far into every night, consulting frequently with the senior U. S. delegate, J. Pierpont Morgan.

When the "Iron Man" returned toward Paris, he was met at the French frontier by three subordinates of the German delegation, bearing copies of the Young Plan. Three hours later Dr. Schacht reached Paris, and for two hours was closeted with Mr. Young. Both emerged in evident good humor. Quickly a special meeting of the Second Dawes Committee was called by Chairman Young, who rapped briskly for order and then said:

"The American delegates have prepared certain figures for annuities which we have shown to Dr. Schacht and he has informed us that he will be prepared to accept those figures if the creditor Powers will accept them."

After these words he gave a brief exposition of the proposed plan, and almost at once Japan's Kenjo Mori rose to voice warm approval. Previously extreme pessimism had been the attitude of the Japanese chief delegate (TIME, April 22, et seq.). Within a few moments it was evident that Britain's quiet Sir Josiah Stamp would back the Young Plan. Only the French and their Continental Allies looked glum.

Key points of the Young Plan:

1) Germany to pay 18 billion dollars over 37 years. 2) The annual payments to average $487,600,000, and of this $165,900,000 to be paid unconditionally, with payment of the rest conditioned on German capacity to pay without impairing the value of the mark--a protection which the Fatherland already enjoys under the so-called "transfer clause" of the Dawes Plan.

3) Bonds to be issued against the unconditional portion of Germany's pledge to pay, and sold to the world public, the proceeds to go at once into the treasuries of the creditor Powers.

4) The bond transaction to be carried on through an international bank of settlement (all details of which had already been agreed upon by the Second Dawes Committee -TIME, March 25).

5) Profits from the operation of the bank to be so huge, according to the expectations of Mr. Young and Dr. Schacht, that after the 37th year accrued and accruing profits and interest will pay off in 21 more years the full total of the German debt.

Two conditions were attached by Dr. Schacht to his acceptance of this plan:

1) That all profits from the international bank must go toward extinguishing the German debt.

2) That if the sum expected to be derived from profits and interest thereon does not materialize it shall be deducted from what Germany owes.

Whether or not the Young Plan would go through seemed to depend, last week, almost entirely on the attitude of France and more especially on that of her chief delegate, Emile Moreau, governor of the Bank of France. Vexation was general when it appeared that M. Moreau was "out of town" getting re-elected as mayor of a tiny provincial village whose chief magistrate has always been a Moreau. Until this "family matter" could be attended to the Second Dawes Committee and the world were obliged to wait.