The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1922-05-15

countries have been invited to give their
advice Mr.. Morgan will meet his part
ner Thomas w. Lamont who is already
in Europe and together they will advise
what can be done with an international
loan if fioated in America. Certain as,
Surances will have to be given of sta
bility in Europe-otherwise American
investors will not feel safe in lending
their money. That means some definite
understandings between France and Ger
many so that the Preparations question
Will not be a constant source of worry
or irritation And when once arrange
ments are made for Germany to borrow
the money whcrewith to pay her indem
nifty, the allied countries will be bene-
fitted because the money they receive will
help reduce their burdens of internal
taxes and business and commerce viii be
stimulated.
Allies in Greatest Danger.
Curiously enough the danger in the flu
ture doesn t lie on the side of the de-
feated country, Germany. 1t works Just
the other way. The victorious countries
are in danger of over speculation as a
result of the flow of indemnity money
in their direction. History of the period
Immediately following the Franco Ger
man war of 1870 shows that Germany
the victor, suffered serious financial
and economic crisis because her indus
tries promptly began to expand on an
eXtravagant basis and the incoming
funds stimulated unwlse speculation.
The government itself spent its money
for public enterprises which were paid
for at high rates of wages and at alb
surdly high contract figures France, on
the other hand came through the crisis
splendidly and financed herself by Dor
rOwings of foreign capital, which she
gradually paid back by increasing her
domestic and foreign trade.
In this connection, ii Is pertinent to
quote from an essay written by Victor
Bonnet in 1878 who SAYS: Two loans
were made in 1871 and 1872 eqIalling to-
gether the full amount of the indemnity
besides a sum of 100000 900 francs for
supplementary expenses. If we had been
able to raise these loans by recourse to
French capital only, that capital
abundant as it was, would not have re-
lieved US from enhancement. 1t would
still have been necessary to take 2,OU0.-
100000 francs from our metallic stock
as we could not pay the Prussians in
any other way than in specie OF its
equivalent Now the sudden withdrawal
of these 2,000.000,000 france in the situa-
ton in which we were and i'm which we
are today. July, 1873. could not have
been effected without a severe financial
crisis. Those who suggested the posi-
bilitv of paving the indemnity by a
public subscription or even by tax. had
not reflected on this result which would
have been disastrous. 1t was only bv
the help of foreign canital that we could
provide the 1000. 900 600 francs which
were still wanting To foreign capital
lists, therefore we annealed and they
have taken a large interest in our loans.
L. this wav by means of the payments
effected bv them we have had large sums
Of our disposal in foreign countries.
Thus have we in two wears and a half
prr I'D 4 no nj nlIr
Indemnity without havinU created an
adverse exchange. without having daDre
GATED our paper money and without
having had to export much specie.'
What Might Have Been.
The foregoing is in line with what is
happening today. Ii Germany could
have secured loan Immediately upon
the close of the war she would not have
been so adversely affected in the ex-
change market and she would have been
able to purchase from American manu-
fatturers much of their surplus stocks
of necessities. Germany would have
gotten much of what she was deprived
of through four years of a blockade and
America would have captured an i'm
portant market But instead German,
was treated as an isolated factor with
ont thought of the effect on her economic
condition on the rest of the world. Ger
many in desperation has made the mis-
take which the French writer IN 1875
said would be disastrous for his country
if attempted-it was the imposition OF
a tax on capital and the over issuance
of paper money.
-Four wears have gone by but at last
the bankers of the world are taking the
situation in hand and the possibility of
borrowing money from American invest
Ors will have more effect on SOLDERING
Furope and tranduilizing her political
situation than all the debates at Genoa
conferences and the like put together