New-York tribune., 1921-06-01
Germany Pays
S35,733,OOO
Here to Allies
First Insta.lment i'm L. :.
On Reparasions Account
Made Through Corre-
spondents os Reiclasbank
Money FURRY Explained
Amount Transferred to Fed
eral Reserve 10 Credit
Of France and Britain

Germany. in accordance with her
,-ou,jses to the Allies, cousummated
her first payment on reparations ac-
count in the American market when she
cnmnlete5 the transfer to the Federal
Reserve Bank of New York of s35. .733,-
o0o from her balances in local banking
institutions.
The Intermediates in this history
making transaction, oue of the most
unusual and interesting in the annals
~ Wall Street were the German
Peichsbank. representing the German
Treasury: the Guaranty Trust Com
PAW. the Equitable Trust Company,
HaIlrarten & Co. and Speyer & Co.
all correspondents here of Germany's s
great state bank.
The actual transfer of this huge
amount was accomplished without dis
turbinc the smooth workings of the
money market, although last week
when Germany was selling sterling
bills in London to provide dollars to
meet the New York payment, the for
eign exchange market was thrown into
q state Of great confusion.
PAYMENT was made here by checks
drawn against the four New York bank
Ing institutions, payable to the Federal
Reserve Bank, and by gold certificates
and other forms OF currency. The
Equitable Trust Company handled the
largest part Of the funds, approximate
IL sl5,000,0o0. the other banks making
available smaller amounts.
Exchange Technique Simple
The machinery By means of which
Germany arranged the dollar payment
WAS remarkably simple, considering the
Aize OF the operation. German bal
ances had been accumulated in fairly
sargs amounts during the last year
and last week between S10,000,000 and
sl3,0o0000 was transferred here by
way of London to add to the total avail
able for making the payment due. 1t
was the transfer from London of this
amount that broka sterling exchange
y such striking fashion last Friday
Vaen the London rate dropped more
than cents IN the pound.
On Friday the four New York cor
respondents Of the Reichsbank, which
had been notified earlier in the week
to prepare for the transaction, were
instructed by cable from Berlin to begin
paying the S35, ,733 ,0o0 due on repara-
tons account in New York into the
local Federal Reserve Bank. Imme-
diately the local institutions began to
draw against the German balances held
oy them In the name of the Reichsbank
ana the funds were turned into the
Reserve Bank. Payments were made
On Friday and Saturday and the paw
ment was finally completed yesterday.
The money stands on deposit in the
FEDERAL Reserve Bank to the credit of
me Bank of England and the Bank of
France. acting for the Allied -Repara~
uons Commlsslon. What further dis
position Will be made of the funds is
not known here by the local banks in
cerested in the transaction. aIthoueh
1t Is assumed that they will be maSe
available st once TO Belgium. France
and England.
Completes Payments Here
The amount paid. s35. 733 ono &c
equivalent to $4,000 0oo German poid
marks. It is the understanding of the
DANGERS here acting for the Reich shank
[nat this completes the payments that
germany Is 20 make in the United
states despite the cable reports from
Berlin that the total amount involved
IS $4,000, 600.
BY virtue OF the transfer Of funds
20 the Federal Reserve Bank of New
1ork on reparations account the
heichsbank, it was learned yesterday.
'S s1Ist'iO9e S<AuddSLeO lis current bal
ances in the United States, and if anv
further payments are scheduled it will
be necessary to make transfers of
FUNDS from London or elsewhere
through 7ae medium of the foreign ex-
change market or through the ship
ment OF gold Not much gold, how
ever. is looked for, because Germany
IS not IN a position to spare such metal
at this time.
According to bankers who are con-
versant with Germany's financial oper-
atlons in the outside world, there was
a steady accumulation Of balances in
London and New York largely through
the sale abroad of German marks. This
made it possible for Germany to have
available the funds needed TO make
the first reparations payment. The
largest balances were held in London.
Wall Street Puzzle Solved
The news Of the completion of Ger
many's first reparations payment solves
a mystery which has been puzzling
Wall Street for several days. The
break last week in sterling exchange
was extremely puzzling to the bank