We draw special attention to the foreign currency in Germany, which, though not included in our valuation of capital held abroad, is so closely akin to a foreign asset that it must not be overlooked. It may indeed be said that this currency, the total of which we estimate at not less than 1 milliard two hundred million gold marks, is a German hold ing in the most liquid form for conversion into foreign assets. 7.8 milliard gold marks, and we think that tal, becomes superfluous the moment there is the middle figure of 6% milliard gold marks no longer any inducement to evade the law. is the approximate total. It is indeed to be feared the laws purporting to compel the return of capital would have the reverse effect to that which might be wished. The method of securing a currency in Germany capable of maintaining a sufficiently stable international value covers the whole question of budgetary equilibrium and the establishment of a bank of issue on a sound basis. These matters, which fall outside the scope of our inquiry, have been referred by the reparation commission to another committee whose conclusions we have the advantage of knowing. If effect is given to their recommendations, we think that a considerable part of the German assets now in foreign countries will return in the ordinary course of trade. While we are of opinion that special legislation to prevent the export of capital or compel its return is not required when a country's finance is on a stable basis, we recognize that in the case of Germany a period of transition must necessarily ensue before stability can be obtained and confidence restored. We suggest that during this period an amnesty should be granted for a limited time from the penalties imposed by existing enactments and that special ter ns be offered for subscriptions to government loans made in foreign currencies. Well-conceived measures of this kind would be helpful in hastening the return of capital and the final restoration of financial equilibrium in Germany, conditions which are essential to the payment of reparation. On the other hand, on a broad view of German financial e pacity, the value of the property in Germany held by foreigners should not be left out of account. The annual yield from this property, whether in the form of rent, interest or dividends, is at present inconsiderable and may at any time become subject to special taxation, particularly in the case of rent in respect of real estate purchased at the low prices current in recent years. We estimate, after very close study of the question, that the real estate and securi ties owned in Germany by foreigners represent a value of from 1 to 1 milliard gold marks. The committee have thought it desirable to give in an annex to this report additional information in respect of their estimates of German assets abroad in 1914 as well as of the principal credit and debit factors, both during nd since the war, that have gone to make up the final total of German capital abroad. The second part of our inquiry was to investigate the means of bringing exported capital back to Germany. The so-called flight of capital in this instance was in the main the result of the usual factors. It arose principally from the failure of the government to bring its budget into proper relation, and, as a corollary of such failure, from the raising of large loons and the direct issue of paper money. Secondly. it was due to the action of speculators and timid investors who sold their marks against the currency of other countries, while the exporters of goods retained abroad all that was possible of the proceeds of their sales. In the particular case under inquiry, however, the flight of capital was accentuated by the attitude of the people of Germany toward payments to her war creditors and was marked by new and ingenious devices and schemes for evading restrictive legislation and for cloaking the real ownership of foreign balances. The failure of the methods employed, both old and new, demonstrates the final ineffectiveness of restrictive legislation when successful evasion is so richly rewarded. Neither legal enactment nor severe penalties resulted in disclosure of assets abroad or hampered the flight of capital. We feel that this would have been true whether the government had or had not used its best endeavors to enforce the laws and regulations. We desire to express our sincere thanks to the officers of the reparation commission, and to the economists, statisticians and expert accountants who have aided us, for whose valuable assistance we are greatly indebted. REGINALD MCKENNNA, Chairman. April 9, 1924. REPORT IS ACCEPTED. was a The report of the Dawes commission accepted by the reparation commission on April 11 and an invitation was sent to the German government to approve it. Repre sentatives of the various states of the reich assembled in Berlin and gave the government full power to act and two days later the government officially accepted the experts' plan without reservations. Within a few days all the allied governments concerned had approved it, though the French found some ob jections which later were removed, Raymond Poincare, then premier of France, though promoter of the scheme, was jealous of the rights of his country under the treaty of Versailles and sought to make certain that they were not endangered. On May 11 general elections were held in France, resulting in the defeat of Poincare adherents and the election of a sufficient number of socialists to give them control of the chamber of deputies. This resulted eventually in forcing President Millerand out of office, the election of Gaston Doumergue in his place and the selection of Edouard Herriot, a socialist, to head a new cabinet. Elections were also held in Germany,. but they resulted generally in favor of the adherents of Chancellor Marx and it was considered that the Dawes plan had been indorsed. This was shown to have been the case when on June 6 the new reichstag approved the government's stand on the plan by a vote of 247 to 183. In our opinion the only way to prevent the exodus of capital from Germany and to encourage its return is to eradicate the cause of the outward movement. Inflation must be permanently stopped. If the issue of currency is strictly confined within the true limits of national requirements on a stable basis of value, the German with capital abroad will feel assured that he will suffer no loss in bringing it home: the speculator can no longer look for a profit from the sale of marks. We have already seen in the case of Austria how, when the currency is fairly stabilized, the necessities of foreign trade tend to bring back existing foreign balances. ReCONFERENCE IS CALLED. strictive legislation, which in the main has With governments holding somewhat similar proved futile in preventing the export of capi-political and economic views in power in Great Britain, France and Germany it was anticipated that an agreement would be reached regarding the manner of putting the Dawes plan into operation. On June 21 and 22 conversations took place in England between the British prime minister and the French president of the council with regard to the reparation question with the result that on June 23 telegrams were sent out from the foreign office in London calling for a conference of the allied powers. Following is an excerpt from the dispatch sent to the Italian government: "Mr. MacDonald and M. Herriot agreed that it was necessary to convoke at an early date a small allied conference solely for purpose of concerting arrangements requisite to put into force the suggestions contained in report of Gen. Dawes which all the governments directly concerned have already approved in their entirety. Since the allied conference would be restricted to this one subject only, the questions of security and of interallied debts will not be discussed at conference but must be dealt with at a later date. Therefore the conference's chief object will be to agree upon terms of an instrument which will formally bind the parties to do the several things prescribed in the report of Gen. Dawes and will be signed both by the allies and Germany. This instrument might take the form of a protocol in order to avoid any appearance of a desire on the part of the allies to amend the treaty of Versailles." Portugal, SUMMARY OF AGREEMENT. This document, which will be known in history as the "London agreement." consists of a protocol and four annexes or agreements. The protocol proper is brief. It is as follows: "The representatives of the Belgian government, the British government (with the governments of Canada, Australia, New Zealand. South Africa and India), the French government, the Greek government, the Italian gov ernment, the Japanese government, the Portuguese government, the Roumanian government, the Serb-Croat-Slovene government and the German government, accompanied by the representatives of the government of the United States of America with specifically limited powers, and the representatives of the reparation commission, being assembled at the foreign office under the chairmanship of the Right Honorable James Ramsay MacDonald, prime minister and secretary of state for foreign affairs, on the conclusion of the proceedings of the London conference on the application of the plan presented to the reparation com. mission on April 9, 1924, by the first committee of experts appointed by it on Nov. 30. 1923. The president states that all the governments concerned and the reparation commission have confirmed their acceptance of the plan and have agreed to its being brought into operation and that in the course of the proceedings of the conference certain agree ments which are necessary to enable the plan to be brought into operation have been drawn up or already signed by the parties concerned. It is understood that these agreements, which have now been signed or in laid down in the agreement forming annex AGREEMENT IS REACHED. The conference was held at the foreign office in London and continued from July 16 to Aug. 16. Among those taking a leading part in the negotiations were the following: For Great Britain-Prime Minister MacDonaldtialed ne varietur (except as regards the dates (chairman). Philip Snowden and Sir Eyre Crowe. For France-Premier Herriot, M. Clementel and Gen. Nollet. For BelgiumPremier Theunis and Paul Hymans. For Italy -Sig. De Stefani, Sig. De Nave and the Marchese della Torretta. Other countries officially represented were Japan, Jugoslavia, Roumania and Greece. The United States was represented unofficially by Ambassador Frank B. Kellogg, Col. James A. Logan, Jr., Frederick Dolbeare and Leon Fraser. The conference ended in an agreement being reached on all the outstanding questions. That this was due not only to the firm insistence of the British prime minister on keeping the scope of the conference confined as far as possible to the experts' report, but, as reported in the London Times, "to the steady conciliatory pressure of the American representatives, Mr. Kellogg and Col. Logan," was generally conceded. Most of the work of bringing the various views of the allies into harmony was intrusted to committees. These virtually concluded their labors on Aug. 2, after which the representatives of the German government were called in to give their opinions. Chancellor Marx and Foreign Minister Stresemann arrived in London on Aug. 5 and began a study of the protocol and annexes to which they were expected to give their approval. Their main solicitude concerned the evacuation of the Ruhr area by the French and with respect to this question, which as a matter of fact was outside the scope of the conference, there was every indication of a deadlock until finally a compromise was reached by which the French agreed to begin the evacuation of the Ruhr as soon as the London agreement had been ratified and to complete it within a ear. With this question out of the way the Protocol and the annexed agreements were ickly formulated and were signed or inibd on Saturday, Aug. 16. "The statement of the president having been approved unanimously by the representatives of the governments concerned and the reparation commission, the president declares the proceedings of the conference at an end. "London, Aug. 16, 1924." This protocol was initialed by the president (Mr. MacDonald), the secretary-general (Sir Maurice Hankey), the Belgian. Eritish, French, Greek. Italian, Japanese, Portuguese, Roumanian, Serb-Croat-Slovene and German secretaries, and by the reparation commission representative. Annex No. 1. This is an agreement between the reparation commission and the German government and is signed by Louis Barthou, John Bradbury, Salvago Raggi and Leon Delacroix for the reparation commission and by Dr. Marx for the German government. It is dated Aug. 9, 1924. The German government undertakes to take all appropriate measures for carrying into effect the experts' plan and for insur ing its permanent operation, and in particular it will take all measures necessary with a view to the promulgation and enforcement of the laws and regulations required for that purpose (specially the laws on the bank, the German railways and the industrial debentures in the form approved by the reparation commission). On its side the reparation commission undertakes to take all appropriate ALMANAC AND YEAR-BOOK FOR 1925. measures for carrying into effect the experts' allied governAn agreement between the ments and the German government concerning the agreement of Aug. 9, 1924, between the German government and the reparation commission. The representatives of the governassembled in London agree that all ments disputes which may arise between the reparation commission and Germany with regard to the interpretation either of the agreement concluded between them, the experts' plan or the German legislation enacted in execution The Gerof that plan shall be submitted to three arbitrators appointed for five years. man government recognizes that the transfer committee is free to employ the funds at its disposal in the payment for deliveries on customary commercial conditions of any commodities or services by the reparation commission after consultation with the transfer committee or by an arbitral commission consisting of three independent and impartial The chairman of this arbitral arbitrators. commission shall be a citizen of the United States. The German government agrees to the appointment of a special committee of not exceeding six members, composed of an equal number of allied and German representatives. to determine the procedure for placing orders and the conditions for carrying out deliveries in kind; for examining the best means of insuring the fulfillment of the undertakings to be given by the German government and for examining the best means of applying the provisions of the experts' report relative If to the limitation of deliveries to those which are not of an antieconomic character. arise relating differences of opinion should to the execution of the experts' report, with particular respect to the inclusion of any class of property in the list, any modification in the list, the scope of any class so ineluded or the measures to be taken to secure that investments to be purchased by this procedure shall not be of a temporary character, such difference shall be referred to an arbitrator chosen by agreement or by the president of the Permanent Court of International Defects in the technifar as Justice at The Hague. cal working of the experts' plan so they relate to the collection of German payments, etc., shall be referred to a committee consisting of the agent-general for reparation payments, the trustee or trustees for the railand the way and industrial bonds. the railway commissioner, the bank commissioner commissioner of controlled revenues for inThe committee shall report to vestigation. the reparation commission with its advice as to the action to be taken. Annex No. 111. This is an agreement between the allied governments and Germany. Article I. says that: A. The Dawes plan will be considered to have been put into execution when: 1. Germany has taken the following meas. ures: (a) Passage by the reichstag and promulgation of laws necessary for the working of the plan. (b) Installation of the executive and controlling bodies provided for in the (c) Constitution of the bank and Gerplan. railway company provided for in the (d) Deposit with the trustees of certifiplan. cates representing railway bonds and such in man may suggest. 2. Contracts for the 800,000,000 gold-mark loan have been fulfilled. B. The fiscal and economic unity of Germany will be considered to have been restored when the allied governments have taken the following measures: 1. Restoration to German administration of the power which it enjoyed in occupied territories prior to Jan. 11, 1923. 2. Restoration to owners of all industrial and other undertakings exploited by the allies since Jan. 11, 1923. 3. Withdrawal of organizations established for the exploitation of pledges. 4. Removal subject to Rhineland agreement of restrictions on the movement of persons, goods and vehicles. 5. Readjustment in the interests of German fiscal and economic unity of the ordinances passed by Rhineland high commission since Jan. 11, 1923. possible delay. Article 2 provides that the experts' plan Article 3 declares that every is to be put into execution with the least effort shall be made to bring the plan into full operation not later than Oct. 5, 1924. Article 4 sets the dates for the cessation of the between occupied and unoccupied Germany: collection of duties at the customs barrier for the reduction of the restrictions on the vehicles movements of persons, goods and between occupied and unoccupied Germany: for the payment to the agent-general of installments of reparations during the transition period and for the payment by him of reparations to the interested allied and associated governments. marks each. The first and second payments the first month. The third payment will consist by Germany will amount to 20.000.000 gold The subsequent payments of the balance to be paid by Germany during by Germany shall be fixed by the agent-general for reparation payments. Article 5 relates to the transfer of the German railway system to the new company contemplated under the experts' plan. Article 6 provides for study of the machinery to be set up to carry out the ment. Article 7 applies to the remission of provisions of certain articles in the agree1923. up to the putting into force of the This amnesty does not sentences and penalties imposed from Jan. 11. present agreement. apply to crimes committed against lives of persons and resulting in death. Article 8 provides that German-allied commissions of arbitration shall be set up. Annex No. IV. This is an interallied agreement. It provides that when the reparation commission is deliberating on any point relating to the experts' plan a citizen of the United States shall take part in the discussions. He shall be appointed by unanimous vote of the reparation commission for a period of five years; if the commission is not unanimous the appointment shall be made by the president of the Permanent Court of International Justice at The Hague. The London agreement was ratified by the French chamber of deputies Aug. 24 and by Much doubt was the French senate Aug. 26. but that body also ratified the agreement, but felt as to the attitude of the German reichstag It was called upon to pass three laws for carrying the experts' plan only by a close vote. into effect, and one of these, the railway bill required a two-thirds majority for passage The vote for it was 314 to 117. and as th banking bill and the industrial debentures bil had already been passed by substantial majori Early on the afternoon of Aug. ties the London agreement was sanctioned. don agreement was formally signed by representatives of the various nations concerned. EXPERTS' PLAN IN OPERATION. The experts' plan went into operation on Monday, Sept. 1. The German finance minister made the first reparation payment of 20,000,000 gold marks under the Dawes plan to a representative of Owen D. Young, who had been appointed temporary agent-general for the reparation commission. The bonds for the loan of $200,000,000 to Germany were placed on the market Oct. 14 and were heavily oversubscribed. The United States took $110,000,000. In accordance with the agreement reached at the London conference the French on Sept. 1 began the evacuation of the DortmundHoerde area and the territory about the Kehl bridgehead. On Sept. 3 Seymour Parker Gilbert of New York accepted the position of permanent agent-general of the reparation commission. JAPANESE IMMIGRATION CONTROVERSY. signed on the one hand to meet the actual requirements of the situation. as perceived by the American government. concerning Japanese immigration, and, on the other, to provide against the possible demand in the United States for a statutory exclusion which would offend the just susceptibilities of the Japanese people. When the new immigration bill was before the American congress in the spring of 1924 the Japanese government through its ambassador in Washington, Masanao Hanihara, protested vigorously against the clause excluding aliens ineligible to citizenship from admission to the United States. Japan maintained that this was manifestly intended to apply especially to Japanese emigrants. The ambassador in conveying his government's views used a phrase which was construed by many representatives and senators as a threat. In a note to Secretary Hughes on April 11 Mr.gration authoritatively show that during the Hanihara, after reciting Japan's objections to the proposed legislation, wrote: "Relying upon the confidence you have been good enough to show me at all times. I have stated or rather repeated all this to you very candidly and in a most friendly spirit, for I realize, as I believe you do, the grave congequences which the enactment of the measure retaining that particular provision would bring upon the otherwise happy and mutually advantageous relations between our two countries." It was the words "grave consequences" which were interpreted as conveying a veiled threat and which hastened the passage of the immigration bill with the exclusion clause included, though this was opposed by Secretary Hughes and President Coolidge, both of whom believed that Japanese exclusion could have been brought about in a more tactful manner and without arousing the bitter resentment of the Japanese people. In a note addressed to the secretary of state and made public April 19 Ambassador Hanihara explained that the words "grave consequences" as used by him were not intended to convey any sort of threat." "Frankly." wrote the diplomat, "I must say I am unable to understand how the two words, read in their context, could be construed as meaning anything like a threat. I simply tried to emphasize the most unfortunate and deplorable effect upon our traditional friendship which might result from the adoption of a particular clause in the proposed measure." Secretary Hughes in reply said he had no doubt that the words were to be taken in the sense stated by the ambassador. "I am happy to add," wrote the secretary. "that I have deeply appreciated your desire to promote the most cordial relations between the peoples of the two countries." THE GENTLEMEN'S AGREEMENT. In the course of the correspondence between the Japanese ambassador and Secretary Hughes Mr. Hanihara had this to say about the famous "gentlemen's agreement" of 1908: "With regard to the so-called 'gentlemen's agreement' it will be recalled that it was de "The arrangement came into force in 1908. Its efficiency has been proven in fact. The figures given in the annual report of the United States commissioner general of immififteen years from 1908 to 1923, the excess. in number, of Japanese admitted to continental United States over those who departed was no more than 8,681 altogether-including not only immigrants of the laboring class but also merchants, students and other nonlaborers and nonimmigrants, the numbers of whom naturally increased with the growth of commercial, intellectual and social relations be tween the two countries. "If even so limited a number should in any way be found embarrassing to the United States, the Japanese government have already manifested their readiness to revise the existing arrangement with a view to further limitation of emigration. "Unfortunately, however, the sweeping provisions of the new act, as clearly indicative of discrimination against Japanese, have made it impossible for Japan to continue the undertakings assumed under the gentlemen's agreement. An understanding of friendly co-oper ation reached after long and comprehensive discussions between the Japanese an American governments has thus been abruptly overthrown by legislative action on the part of the United States. The patient, loyal, and scrupulous observance by Japan for more than sixteen years of these self-denying regulations. in the interest of good relations between the two countries. now seems to have been wasted." RELEASED FROM UNWRITTEN PACT. In a note made public June 18 Secretary Hughes said it was proper that the Japanese government should be considered released from July 1. when the new immigration act became effective, from any further obligation under the gentlemen's agreement. He also showed that the United States had always reserved the right to control immigration and that the Japanese government had repeatedly recognized that fact. Several incidents occurred in Japan showing the resentment of the people against the American exclusion law. but the authorities succeeded in preventing any serious outbreaks. Cyrus E. Woods, the American ambassador to Japan, resigned his position owing to his opposition to the exclusion act. MINE DISASTER AT JOHNSTON CITY, ILL. Thirty-three men were killed and half a the mine manager, and Jesse Ford, the mine dozen others severely injured by an explosion boss. The disaster occurred on the main level in the McClintock coal mine at Johnston City.of the mine in which approximately 375 men I.. early on the afternoon of Jan. 25. 1924. were at work. The mine was considered Among the killed were Herbert McCullough, unusually safe so far as gas was concerned. Secretary for Scotland-Sir John Gilmour. Parliamentary Secretary to the Board of Edu- Member of cabinet, Wilford The British parliament, in which the highest legislative authority is vested, consists of the house of lords of about 740 members and the house of commons of 615 members. The statutory life of parliament is five years. Area and Population-The total area of England, Scotland, Ireland, Wales. the Isle of Man and the Channel islands is 121,391 square miles: the total for the British empire is 13.257,584 square miles. The total population of the empire in 1921 was 440.of the united 993,000. The population kingdom in 1921 was: England, 35,678,530; Wales. 2,206.712: Scotland, 4,882.288: Ireland, 4.390.219: Isle of Man, 60.238: Channel islands, 89,614. Total, 47.307.601. The cities of England and Wales having more than 100.000 population each were in 1921: Birmingham. .4.483,249 Croydon .... 803.118 Southampton London Liverpool Manchester. 730.551 Sheffield Leeds Bristol Sunderland.. politan police district, the population of "Greater London" in 1921 was 7.476.168. Population of the chief cities in Scotland in 1921: Glasgow .1,034,069 Dunfermline. Edinburgh.. Dundee 39.886 420,281 Kirkaldy 39.591 168,217 Hamilton 39.420 158,969 Kilmarnock.. 35,756 84,837 Ayr 35,741 81,120 Falkirk ..... 33.312 46.515 Perth ....... 33,208 43,909 Aberdeen INDIA. The Government-Governor-general, Earl of Read- Area and Population-The total area of British Central 495,899 provinces. 13.908,514 26,833 Coorg .... 7,598.861 Delhi .46,653,177 Northwest 164,459 486,741 Baluchistan. 421,679 Madras .42,322,270 ....1,263.2921 Bangalore 45,590,946 238.111 215.781 213,044 404.225 Benares.. 199.493 339,527 Agra 185,946 303,148 Poona 176,671 160.409 155,970 Calcutta THE IRISH FREE STATE. between Im The Irish Free State was organized under a treaty Great Britain and Ireland signed Dec. 6, 1921, and ratified by Great 190.887 Britain Dec. 16, 1921, and by the dail eireann, It provided 178,678 or Irish parliament. Jan. 7, 1922. 160.997 for a provisional government to act until sucThe pro159,100 ceeded by a legal administration. 157,561 visional government was organized immedi145,592 ately with Arthur Griffith as president and a 145,001 cabinet consisting of the following ministers: 142,427 Finance and defense, Michael Collins: home Middlesbro'gh 131,103 affairs, Edmund Dugan: foreign affairs, Gavan 287.013 Derby 285.979 Coventry 274,955 Blackburn Nottingham.. 262.658 Gateshead Portsmouth.. 247,343 Stockport |