The international financial experts who were invited by the German government to examine the financial and economic situation in Germany have submitted their reports and communicated them to the Reich government.
The first report, signed by Messrs Brand, Cassel, Jenks and Keynes, reads as follows:
First part: Report on the stabilization of the mark.
1. We are fully convinced of the urgent need to stabilize the German mark immediately.
This is an essential prerequisite for saving Germany from the threat of total collapse.
It is also essential in the interests of its creditors, whose claims would otherwise lose value.
If certain concessions, which we discuss below, are made by these creditors, stabilization is possible.
But it must come primarily from Germany's own efforts and through its own strength and the determined action of its government.
It is hopeless to hope for stabilization from foreign aid in the present situation, since Germany must have its own constructive policy as the most important basis;
also,
if there is a risk involved.
There is no other way open.
2. When asked whether stabilization is possible under the current circumstances, we answer: no;
a) for internal reasons, primarily the effects of the financial policy of the German Reich in the war and post-war period;
b) for external reasons, in particular because of the burdens arising from the Versailles Treaty.
We will comment below on the necessary internal measures.
3. With regard to the external burdens, we believe that unless Germany is relieved for some time of the payments under the Versailles Treaty, any attempt to stabilize the Mark would fail and lead only to the useless squandering of Germany's last reserve.
Such relief is therefore the indispensable precondition.
The length of the period for which payments are to be suspended will depend on the possibility of achieving a surplus in the German state budget.
The most important consideration is that payments can only resume when they come from an economic surplus and not from new inflation.
We believe that this period should currently be set at a minimum of two years.
4. Any stabilization plan can only be regarded as provisional as long as a final and quick and workable settlement of the reparations problem is not found.
However, in view of the danger of waiting only for some time, we believe that if necessary, stabilization should also precede the final settlement of this question.
5. If the relief just proposed is granted, the success of a stabilization plan does not depend on a foreign loan, but rather on the structure of production conditions and the state budget in Germany, and on the final settlement of the reparations problem being taken as soon as possible becomes.