extract from the Experts' report

The conditions of realization

Germany can meet the treaty burdens by stabilizing its currency and balancing its budget if the following conditions are met:

1. That the Reich develop its resources by increasing its taxes and reduce its expenditure.
2. That the reparations commission accepts the principle of a partial and decreasing moratorium of four years.
3. That the Allied governments restore the German economy to its internal unity and freedom.
4. That Germany obtains a loan of 800 million gold marks. GERMAN ECONOMIC UNITY AND THE OCCUPATION OF THE RUHR

In paragraph 2, which constitutes the very basis of the argumentation of the report of the first committee of experts (Dawes report), the said report states textually the following:

"The committee had to investigate to what extent the balance of the budget and the stabilization of the currency could be permanently re-established in Germany as it finds itself at the present time with the limitations placed on its fiscal and economic rights in part of its territory.

We must say straight away that it has not been possible for us to find practical means of ensuring the permanent stability of the budget and the currency under these conditions, and it seems unlikely to us that these means exist, the solution of The double problem that was submitted to us actually involves the restoration of Germany's external and internal credit, and it seemed impossible to us to foresee this restoration in the first eventuality. We were therefore forced to admit that "the fiscal and economic unity of the Reich will be established, and our entire report is based on this hypothesis.

Guarantees and possible sanctions

And paragraph 3 adds:

If political guarantees and sanctions intended to ensure the execution of the proposed plan are considered desirable, they do not fall within the competence of the committee. The terms of his mandate also do not qualify him to examine questions of military occupation.”

We would like to add right away. concludes this same paragraph, that if the economic system currently in force in the occupied territories is modified, we are unanimously of the opinion that a reparations settlement must be reinforced by productive and adequate guarantees. To this end, we are proposing control procedures which, we believe, will be effective while not preventing the restoration of financial stability.