MONEY MARKET NOTES ANGLO-GERMAN PAYMENTS 1934 AGREEMENT REVISED

" FINANCIAL TIMES" SPECIAL A few days ago financial and business circles greeted with evident satisfaction the successful outcome of the negotiations between Britain and Germany in respect of the Austro-German loans. Now comes news of further progress in the direction of improving Anglo-German relations. This is the conclusion of a new agreement between the two countries in regard to the payment by Germany of commercial debts due to Britain. The new pact is a revision of the AngloGerman Payments Agreement which was established in November, 1934. As is usually the case in financial, legal, political and other documents, the phraseology of this agreement is not too lucid. It does seem, however, that as with the recent debts settlement. Germany has made some concessions which emphasise her desire for co-operation and improved relationship in financial and trading affairs. liy the new arrangement, the Reichsbank undertakes to earmark each quarter alln amount of £i'- millions sterling- -with the addition (or subtraction) of 90 per cent. of the excess (or deficiency) on a sum of £'71 millions for German (including Austriani exports for the preceding quarter - to pay for United Kintgdom t'exports. This means that as long as German exports per annum exceed £30,000,000, the amount to be earmarked for e(rman imports of United Kingdom goods will exceed £18,0001,000) by )90 per cent. of the total by which German exports to the United Kingdom exceed £:0,000,000. Effect of Arrangement German exports to this country have exceeded £1:0,000.000 per annum for years. They were even greater than that figure in 1933, when Germant tr'ade was at a low ebb. Let its examine the value of Great. Britain's trade with Gei'tiirmany and Austria for last year accoirding to the Board of Trade lReturns. Here are the figures: - (erillany Austria Total Imports 36,188,372 2.2 8(i.,271 ;3X,874,648 Exports 21,623.971 1846.76(0 23,470.731 Re-exports 7,300,913 670.350 7,971,263 (65.113,256 5,203.386i 70,316(i(i42 It will lbe seen from the above that German and Austrian exports to Great Britain exceed £38.8 millions. Ont the basis of the new arrangement assuming similar figures the Reichsbank would earmark, presumably, a sum of nearly £26,000,000 in all that is. £18,000,000 (£4 millions per quarter), plus £7.98 millions (90 per cent. of £8.87 millions Ibeing the excess of German and Austrian exports over 1£30,000.000). Under the 1934 agreehment, which applied only to Germany, the Reichsbank guaranteed 55 per cent. of the value of German exports to the United Kingdom in payment of U.K. exports to Germany. Hence, otn last year's figures, the sum so earmarked would have been under £20,000,000. It would seem, therefore, that, even after adding the full amount illn sterling received from Austria prior to her annexation by Germatny, the niew "deal " promises larger sums in sterling than the old agreement. It should be noted that calculations under the agreements are based upon the average of the German export statistics and...