The Washington herald., 1921-05-22

French have already expended over
$4,000, 100000 on actual reconstruc-
tion work in the devastated area
and must spend at least as much
more to rebuild the houses, the re-
construction work having hitherto
been limited to restoring roads,
canals, railways and clearing the
fields and putting them to work. One
may say, quite Accurately that the
actual payment demanded Of Ger
many would In no instance meet the
costs OF making good what German
arms on land, on the seas and In the
air. actually destroyed.
But will the sle,5oo. .ooo, ,ooe bond
issue actually net the sum which Is
by, the face value? The
bonds carry an interest rate Of s
per cent. but the present current
rate. OF interest fs far higher and
good Americ6n railway securities,
for example, are disposed OF with
difficulty at q per cent rate OF in
terest. Judging by existing condl-
tions, then, the German bonds must
be issued much bolow par. Thus
the actual yield to the creditors will
not be si2.5oo. .ooo, 900. but a much
lower sum. which will be the price
which can be obtained in the open
market for these bonds. Moreover,
France, Italy and Belgium must sell
these bonds in the open market.
Thus, you may say without exag-
geration that the sum total demand
ed of Germany will not be sufficient
tn discharge the debts owed by the
European allies to the United States.
even IL not a dollar were retained
in Europe to pay for reconstruc-
tions.
Look to United states
NPut can the bonds be sold on the
markets of the world? This, after
all, is the really grave problem.
Europe believes. Paris trusts, Lon
don hopes, that the United States
Will absorb the larger portion of
this German issue. In reality the
American market is the only market
in which. even conceivably. these
bonds can be sold. always providing
that Germany sooner or later ac-
cepts the conditions laid down in
London. But is there any reason
able chance that the people OF the
United States will consent to invest
another SI2.5oo, 900. 900 in European
in addition to $4,000
.o0o, eco in government loans, and
at least 5000. 100000 in private
credits already inyested7
Is there even any real basis for
believing that the government of
the United States would accept the
sI2,50O, ,00o. 900 of ponds or any con-
siderable part thereof in return for
the notes of. the allied countries al
ready held and thus become COM
pIeteIy entangIed Vim the political as
well as the economic problems OF
Europe? Actually, IL We did fNts, we
should be the most interested party
in compelling German payments and
would. not impossibly find ourselves
presently obliged to cancel the Ger
man bonds or resort to force to
compel payment.
BONDS May he Drug.
But. IL the United States does not
officially or through private chan
pels consent to accept the German
bonds, to absorb them, If the Ameri-
can investors. will not consent TO
purchase many billions or take
these billions as an offset for Ameri-
can loans then the European situa-
tion will not be much improved,
even IL Germany willingly or un-
willingly submits to the London de-
cision. The new book of Andre
Tardieu describing the whole Paris
conference should re carefully ex-
amined by all Americans at this
time, to get a clear notion of what
Europe then expected-and beyond
doubt still expects of the United
States-in the matter of financing
world rehabilitation.
The thing France. Belgium. Itafv
must have is money. not BONDS.
And the publics of these countries
are stocked to saturation with the
issues of their own governments
II is out of the question TO believe
that IL and when German bonds are
issued. the French. Italian and Bel
gian publics can take up the
amounts issued to their several
countries and thus supply funds
for their governments TO complete
the work of national rehabilitation
The real and immediate value of
the German reparations bonds is
exactly the value placed upon them
BY the American investing public
Denies Cancellation,
At the Paris conference the con-
tinetal European nations believed
that the United States would do