New-York tribune., 1922-06-11


fneludinr that Of the Brussels confer
snes Of the autumn Of 1890.
Project Entirely Feasible
In the conclusion Of their document
the bankers give the Reparstion Com
mission assurance that III the com
mittes felt obliged TO be diseouraSins
regarding the prospects OF loan IN tne s
present condition Of Germanys ereoi'
/ desires 20 be no less emphatic IN
statine its conviction that, providing
the Necessary conditions for the re-
yivsi OF her credit can be realized, sub.
.tant,sl loans could be hoated In all
the main markets OF the world Pure
lv financial conditions are now more
de1nitely favorable TO the issue OF suen
a loan II conditions referred 10 here can
be secured"
This ultimstum Of the bankers naust
be accented by Europe rs such, Inc
hankers are aware that 1t would be oi
tremendous importance to the woria
o-sduallv 70 convert the German debt
70 the Allies into private hands on the
line Of other public debts and not upon
external sanctions.
The committee warns that there Is
I,ttle time 70 lose so far as Germany Is
concerned, because her financial eonoi-
ton can become dangerous even Win
short delay.
PARIS. June 10 (By The Associated
prs,s),-After reviewing their opinion
AZ their Functions, the statement OF
the bankers 70 the Reparstion Commit
tee SAYS, in part:
ain these circumstances the commit
tee were left to consider whether they
could usefully continue their studies IN
response to the majority invitation OF
tho commission. They decided that
for the time being they could not 90
so. for the following reasons;
h(i) France Is Germany's chief credi-
tor. In any reparations problems her
interests are the most important rae
tor. The members Of the committee
Lad hoped that tho chief beneht OF any
advice they could have given would
have been derived by France. They are
All extremely anxious that no action OF
theirs should injure her interests. ~,
France does not now desire
any inquiry into the more general CON
ditions necessary for the re-estnoiisn-
ment Of Germany's external credit, the
committee do not feel justified in un'
such inquiry. They are con
armed In their view by the eonsidera-
tion that in the existing circumstances
thew could not have prohted by the
assistance OF their French colleague
Atmospher. Held Unfavorable
~(z) As explained below, the com
rnittee consider that a favorable atmo-
snhere Is essential to successful hota-
tior, AZ n loan. The known differences
N view among the members OF the
ON nis,ion as TO the limit OF the COM
nittee's mandate have for the time
hsino created an atmosphere unfavora-
III. 20 such an issue. The bankers on
the ronmittee cannot fall TO take into
account this fact, being aware tnat II
thew advise as to the condition.. OF
loan they incur moral responsibility 10
do all in their power to make the loan
successful.
sFor the above reasons the commit,
tee decided that they must suspend
their work for the present, feeling that
thev were thus. unable 70 take advan-
taoe Of the majority invitation Of the
commission 70 extend the scope OF
their deliberations. The committee
considered the problem presented un-
der the original mandate rs 1t was nn-
derstood in It's more restricted sense.
"On the assumption that the. pres
on. pro,Isions Of the Treaty Of YER
sailles and the schedule Of payments
remain unchanged, Is an external loan
rossible. and. II so, under what condi-
tionsl The committee were confronted
with the following difficulties;
"(a) II was understood that the re-
establishment Of the general creoit OF
Germany is impossible so long as the
lending public feel no assurance that
the obligations or Germany as they are
at present defined and as they may be
enforced are within her capacity or
that her will and intention to meet
them will be maintained. so long as
this is the position an investor Is
bound to be Influenced by the possi-
bility that a collapse OF German hnanee
resulting from present uncertainty may
produce social upheaval. 1t is, how
ever, dihicult TO find securities when
under such conditions would be regard
ed as a satisfactory guaranty Tor a
loan, or nj least for any loan OF such
dimensions. and for such terms az 70
give substantial relief to the situation.
Investor Not an 0ptimlst
"Even frst-elass security, like the
customs, which under stable condi-
tions would provide sound guaranty
for a considerable loan, might fail 70
retain sufficient gold value II the
economic position OF Germany or her
social conditions were seriously dis
organized. Such possibilities may be
remote, but the investor in a long
dated note naturally tends 10 envisage
the worst, rather than the probable.
"(b) II was stated that investors In
some Of the most important countrieB,
notably the United States and Great
Britain, would find no real attraction
In a loan to Germany which was not
calculated TO promote the permanent
settlement Of the reparations prob
lem. And 1t is obvious that even II a
loan could be raised on the basis Of
assigned securities, rather than on the
basis Of Germanys general credit, II
could at best do no more than assure
a short respite, and thereafter Ger
many would be faced with her undi-
minished reparation obligations. with
the further handicap that her best Sc
eurities would have been already
mortgsged for the service Of a loan.
"ln the mean time both Germany and
the rest Of the world would have been
suffering from continued uncertainty,
which In every country is a serious
obstacle TO economic recovery. Thus.
even II such a loan were possible, II
would represent at best the payment
Of heavy price, merely in order to
wait for conditions which might be