Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-05-16
J.P. MORGAN SAILS
To ASSIST EUROPE
WITH HER FINANCES
Lamont Predicted Before End
of War That World Would
Have to Help Germany Pay
Indemnity
BY DAVID LAWRENCE
(Leased Wire Service to The Journal.)
Copyright, 1929

WASHINGTON, May 15.-J. P.
Morgan sailed for Europe today to
advise European bankers how an
American loan may be floated to
help Germany pay the damage she
dill in the war. That's the simple
announcement of the day, but it is
full of significance for the future.
1t is the beginning of a series of
steps Of far-reaching Importance to
American industry and commerce
and recalls a hitherto unpublished
incident which illustrates how far
sighted bankers can be.
Just two months before the armi-
stice of 1918, Thomas w. Lamont, a
member Of the firm Of ]. p. Morgan
& Co., visited the White House, and
had a long talk with President Will
son about the possibilities of world
economic reconstruction should the
war come to an end. On the train
to New York, Mr.. Lamont said to
this correspondent:
1.-The war is not over and sup
pose it would create great .consterna-
ton to say it, but when the war is
over and Germany has to pay a
big Indemnity. you will find the allies
lending the money to Germany to
pay her indemnity"
"Do you mean that the United
States Will do such a thing?"
LamOnt's Foresight
Eyes, the people of America and
Great Britain have the money to
lend. I suppose it sounds fantastic
that we should lend our enemies
the money but that's what will hap
pen. I have just been reading what
occurred after the Franco-German
war Of 1870. At that time France
had to pay Germany, and she bor
rowed the money, and the investors
in the other European countries, in
GLIDING Germany herself, lent that
money. 1t may not be popular to
write about it now, but put it in the
back of your mind for future USE"
Mr.. Lamont foresaw, therefore, as
early as September, 1918, the pros
pest on an interest loan. Nearly
four years have: elapsed since then
and the problem of Germany in
demnity payments has not been solv-
ed. The Preparations commission
created the Versailles treaty is sup
posed to regulate the flow of Ger
to-
knows Germany can't pay at once
or even periodically without some
sort of loan. Bankers Of all coun-
tries have been invited to give their
advice. Mr.. Morgan will meet his
partner, Thomas w. Lamont, who
is already in Europe and together
they will advise what can be done
with an international loan if float
ed in America.
Certain assurances will have to
be given of stability in Europe
otherwise American investors will
not feel safe in lending their money.
That means some definite under
standings between France and Ger
many so that the reparations ques-
ton will not be constant source
Of worry and irritation.
Allies to be Benefited
And when once arrangements are
made for Germany to borrow the
| money wherewith to pay her indem-
nifty, the allied countries will be ben
Gifted because the money they re-
ceive will help to reduce their bur-
dens of international taxation and
business and commerce will be slim
ulated.
Curiously enough the danger in
the future doesn't lie on the side of
the defeated country-Germany. 1t
works just the other way. The vic
torious countries are in danger of
over-speculation as a result of the
flow of indemnity money in their
direction. History of the period i'm
| mediately following the Franco
German war of 1889 shows that
| Germany the victor suffered a Sc
rious industrial and financial crisis
| and her industries began to expand
on an eXtravagant basis and the in
coming funds stimulated unwise
! speculation. The government itself
spent it's money for public enter
prises which were paid for at high
| rates of wages and at absurdly high
! contract figures. France, on the
| other hand, came through the crisis
| splendidly and financed herself by
| borrowings of foreign capital which
she gradually paid back by increas-
| ing her domestic and foreign trade.