Evening star., 1922-06-12
MORGAN BEARSOUT
GOVERNMENT VIEW
Reasons for Calling German
Loan ImpracticabIe Give
Satisfaction.
BY DAVID LAWRENCE.

Although ]. P. Morgan attended the
bankers conference at Paris purely
as a private citizen and possessed of
no official connection with the United
States government, the statement he
issued in France. setting forth the
reasons why a loan to Germany was
at present impracticable, was re-
ceived here with the fullest satisfac-
tion.
Mr.. Morgan's insistence that the
Preparations problem must first be
settled, and that there must be
unanimity among the allies on this
question, is reflection of the views
held in off1cial quarters here.
The effort OF certain semi official
newspapers in France to blame the
United States for the failure of the
bankers conference on the ground
that German reparations cannot be
reduced because America will not re-
today by informal statements on the
part of high officials here to the
effect that German reparations and
the allied debt payments to America
were two separate and distinct
things. This was the position of the
subject was broached abroad. and
officials today emphasized that the
Harding administration felt the same
way about it.
Try to Shift Burden.
The French stood So positively
against reducing German reparation
payments that the effort of the in
ternational bankers to arrange for a
loan to Germany wherewith to pay
her debt gradually was doomed.
France, however, is unwilling again
to be placed in the position of block
ing world reconstruction and the
French press Is. therefore. trying to
shift the burden to America. This
kind of tactics hardly increases the
affection of one country for the other
and admittedly makes settlement in
the future much harder, but SO long
as those in authority in France stand
adamant on the reparation question
the chance of American cooperation
through private loans is remote.
Since the American government took
it's stand firmly against the lending
Of any more government funds to Eu-
rope the only opportunity European
governments have had to adjust their
finances has been through loans
United States and other countries
where the war did not materially af-
feet Investment resources. Mr.. Nor
gan's trip to Europe was undertaken
with the belief that the French would
consent to a modification of the scale
of reparation payments, and with the
expectation that loan to Germany
would start the ball of reconstruction
rolling in Europe. France owes large
sums to Great Britain and has been
insisting from the start that her pay
ments to England will depend on her
trying to get the United States to ac-
cept the same line of reasoning with
respect to the war debt due this
country. The policy will fail. and
Frances opportunity to raise funds
for any purpose will be diminished
here.
Sooner or later a ministry will arise
i'm France which will handle the ques-
ton more adroitly for which the gov
eminent here refuses to admit that
there is a relationship between Tepara .
tions and the funding of the allied
war deft, the connection is too obvious
to escape. The only difficulty Is IN
getting out of vicious circle. At
present neither side will recede.
Eventually, however. If Germany
reparation obligations are eased
either through postponement or actual
reduction in the scale. the American
commission which was created TO
fund the allied debt will have to take
into consideration the available
sources of income and assets OF the
allied countries and ease their burden
too. But America will not take the
initiative or offer active help until
Europe does something for itself.
Economic reconstruction is being de-
layed by the uncertainty which sur
rounds the reparatton problem-the
threat of coercion constantly made by
France, the tendency toward dtssolu-
tion Of the existing order In Germany
IL pressed too far and the indinerence
Of France toward the balancing Of her
internal budget due to the alleged
necessity of keeping large army to
enforce the treaty of Versailles, which
means in the main the collection OF
reparations.
Mr. ,Morgan's statement advances
the case q step or two further and
gratifies ofiicials here because 1t may
have the effect Of making France see
that hope of American aid cannot be
entertained until the German repara-
tion problem is viewed, not from
sentimental or nationslistic. but from
a practical and economic ntifeine
tCS.s l..ht, 1V-22.J