New-York tribune., 1922-07-11
Report That J. P. Morgan
Would Attempt to De-
wise New Deal in Rep
arations Also Denied
Mark May Be Devaluated
huge international Loan Fol.
lowing Moratorium Seen
as Only Way Out of Crisis

German Republic urged that the United
states step in to break the deadlock
by scaling down Frances debt to the
american Treasury in consideration of
the withdrawal of French objections to
modification Of the reparation agree
ments with Germany. A logical result
OF this action, it was urged, would be
for American bankers to participate in
the underwriting of a huge interna-
tlonal loan for Germany, such as re-
Gently proposed by J. P. Morgan, which
Will be prior lien to the reparation
claims of the Allies. Such develop
ments, II accompanied by moratorium,
would tend to bring up an economic
balance in Germany which would be re-
nected in the stabilization of the mark
no matter what happens, the prevail
ing banking view is that the mark
would have to be devaluated. It is now
cent of par. Of the total number of
marks ding-approximately 16e,-
o,oOo,0oO-about one-half, it is esti-
mated, are held in the United States
ana other foreign countries by indi-
viduals who acquired marks for specu-
lative purposes.
Exchanges Show Recovery
After touching the lowest level ever
quoted-.lSM of q cent--last Saturday
marks and other continental European
exchanges recovered moderately yester-
day. A slump is usually followed by
sllght buying wave by business men
VINO need foreign exchanges to pay for
purchases abroad and by spectators
Inc report that q moratorium had been
requested encouraged some to believe
That relief was in sight.
international bankers do not believe
LaL-
Germanys condition are exaggerated.
A limited amount of bluffing is sus
pected in the German attitude, perhaps
designed to influence more moderate
treatment by France, but the situa-
tlon as described in private advices
from competent sources is character
lied as fundamentally critical.
There was much conjecturing yester-
day as to what practicable steps may
be taken at this stage to soften the
German crisis or its aftermath. 1t
has been suggested that the interna-
tional banking committee, of which
J. P. Morgan is the American member,
might be reconvered in Paris to re-
sumo preparation of plans for o loan
to Germany, %ut the efficacy of such
step is made dubious by absence of
information that the position of France
has altered to the point where accept
ance of the bankers recommendations
would assure the success of the effort.
Further, a question is raised as to
whether it is not too late for loan
to Germany to solve the problem to
the extent that would have been real
lied month or so ago.
Morgan Not to Intervene
No intimation has been received from
abroad that the reconvening of this
committee is contemplated, and re-
ports that Mr.. Morgan might attempt
individual action, going himself to Ger
many, were denied yesterday.
yesterday in estimating the value of
the moratorium for which Germany
has asked. Germany is understood to
have funds in hand to meet the July Is
instalment of 50,000,000 gold marks
on reparations account, but to be un-
able to meet subsequent instalments.
Remission of the approaching pay
ment, it was suggested yesterday,
might prove beneficial.
The American interest in the situa-
tlon was characterized as direct only
in so far as there are outstanding obliga
tions due American banks and investors
from the German government or from
German concerns or Individuals Amer
lean holdings of marks and Of mark
securities are known to be large, al
though speculative purchases of this
class have recently tapered off rather
sharply.
An amount running into millions of
dollars, representing the financing of
trade with Germany by the banks, is
outstanding on open account. No exact
statement of the total is obtanable,
but it was said yesterday that $50, 100000
would represent an ample estimate.
Most of the accommodations extended
by American financial institutions and
houses to finance this trade have been
secured by commodities or otherwise,
minimizing the probable losses should
Germany collapse.
Think July Payment Sure
A further item is represented by the
balances Of American banks in Ger
many, which are placed at approx
mately a like amount. The bulk of
these are in dollars; and, unless they
should be seized, as was done in the
case of the Russian revolution, little
fear is entertained as to their safety.
The chief weakness attributable TO
the German outlook in yesterdays
financial markets occurred in the bond
market where French and Belgian
issues declined sharply. The French
Government TVS were offered in partic-
ularly heavy volume and sold down
to 97a4, netting loss of 2A points
Declines Of similar or greater proper
tions were registered in other bonds
of the French and Belgian govern
ments and also in the loans of French
municipalities. Cotton worked lower,
continuing the decline that set in last
week, but other markets recovered in
part the losses that were motivated by
this factor.
Bankers IN intimate touch with the
affairs of the German Treasury De-
partment reiterated that arrangements
had been completed to pay the July Is
reparation instalment of 50,00O,000 gold
marks in exchanges and in kind. 1t
was said that payment of cash would
be made chiefly in sterling exchange.
Another 50,000,000 gold marks will be
due on reparation account on the 18th
of each succeeding month of the year,
except November and December, when
60,000,000 will be due each month.
Wife Beats Delinquent Mate