The New York herald., 1921-06-17

Special Cable to THE NEW YORK HERALD.
Copyright, 1891. by THE NEW York HEsALp.
New York Herald Bureau.
Paris, June 49,
France has put up to the Allies a
plan for handling the first series of
German reparation bonds to the
amount Of $4,000, 100000 marks gold,
which. according TO the London pro-
tocol, must be delivered by July l.
The plan is understood to have been
prompted by conversations which the
French Government has had with GER
tain American financiers. It is in the
nature of departure from the original
scheme, which was for placing the
German bonds themselves on the mar
ket with or without an allied guaranty.
The French Government has been
informed by bankers that there would
be no market for these bonds for n
long time and that they would have 10
be placed at between 60 and 70.
The plan which the French now
propose and which is under considera-
| tion by the other allied Governments
calls for an Immediate distribution Of
the first 1900, 900, 900 marks gold of
German reparations bonds among the
various Allies after the manner of di-
vision agreed upon in Spa.
Each of these Governments would put
Its share OF these bonds In its treasury
and issue its own bonds for the amount
of its holdings of German reparation
bonds, thus pledging not only the Ger
man promise TO pay. but its own good
faith and resources behind these securi-
ties. The bonds which each of the al
lied countries would Issue in this man
ner would bear the same interest as the
German bonds and the discount would
be charged against Germany. II these
bonds were issued in small instalments
it is believed they could be placed.
This plan would greatly eurtail the
functions of the Reparation Commits
sion, as the commission, instead OF act
ing as a syndicate manager and hold
ing the interest and amortization on the
German bonds. would resolve itself into
a mere clearing house, Immediately turn
ing over to each ally It's share of the In
terest and amortization payments.
French financial experts believe that
with the German bonds distributed this
way and each OF the Allies having its
own securities out against IL. greater
financial solidarity would be promoted
among the Allies in keeping Germany TO
the fulfilment OF her obligations.
England. with only 22 per cent. OF the
German reparation bonds. could. the
French believe. absorb some os the
French issues. and II Is held here that
even the Germans themselves would rind
the new securities more attractive than
the reparation bonds issued by their own
Government.
Under this plan Germany, the French
saw. could make any special arrange
n,ents she liked with each nation hold
ing her repsration bonds regarding pay
ments In kind and In cash, which is what
Dr. Walter Rathenau. German Minister
Of Reconstruction, has been urging.
France expects TO get about 4,225,00O
gold marks out OF the first GcrTnHn
reparation bond issue after Belgium's
priority and other deductions are
cared for and n France is able to get
for these bonds $1,000. 100000 from the
United States and other nations during
the next ten years. II Is being pointed
out here that her financial situation Will
be better than II she ie compelled to walt
for the amortization of tho German
bonds