The New York herald., 1922-06-11
Points to Differences in the
British and French
Views.
OFFERS HELP IN FUTURE
Scope Of Discussion Conducted
by Bankers Explained by
New York Financier.

J. p Morgan issued the following
statement in Paris yesterday. explaining
the status of the proposed German loan,
the reason fo- adjournment Of the bank
ers' committee. and his attitude toward
the proposal:
When was invited by the Repara-
tions Commission to serve on the bank
ers' committee. had some hesitation in
accepting. as it appeared that under
the terms OF the reference / could ac-
complish little more by coming to Paris
than by cable advice from New York
Upon further consideration, however,
felt that the matter was of such enor-
nous Importance to Europe and also to
the United States because OF their COM
mercial relations with Europe, I could
not well refuse. Therefore, in the hope
that something constructive could be ar
rived at, l came purely as a private citi-
zen. holding no authority from my Gov
ernment to discuss In any way matters
under their control, but as q banker en-
gagged in the distribution of securities
in the investment markets of the United
States and only representing those mar
kets in so fa- as their condition might
permit.
II explained at the first meeting OF
the committee that there is no interest
in the United States in loan to Ger
many per Sc. There is however, in my
opinion, a growing appreciation in the
United States of the fact that it's own
prosperity Is to q degree dependent upon
the prosperity Of the allied nations and
that the prosperity of the latter is, in a
large degree, dependent upon the re-
habilitation Of German credit
Mentions Two Condition..
II consequently believed that the
American banker and investor could be
interested to a substantial degree in the
purchase Of German obligations IL two
fundamental conditions were satisfac-
torily established.
First. Such loan should be at the
request and would be for the benefit al
the allied nations. This could be In no
way better expressed than by the active
cooperation OF the private bankers of
the allied countries in the distribution
OF the German securities to their own
nationals.
Second. Through the technical se-
ourity to be given by Germany and the
rehabilitation Of - internal financial
sitdatioD, Germany Should clearly show
desire to meet It's obligations in the
nope tndt Dy tHe IulHllInent OI tneSe OD-
legations 1t could reestablish Its credit
as one of the commercial nations of the
world.
shortly stated. therefore. the two
fundamental conditions OF American
participation we're, In my opinion,
unaninnity among the lenders and the
establishment OF the credit Of the bor-
rover.
EARLY in the discussions Of the COM
mittee it became apparent that there
was a difference between the English
and French texts Of the reference from
the Reparations Commission to the
bankers committee. This difference
touched thesvery root Of the matter In
that the French reading definitely pro-
hibited the committee from giving con-
rideration to the schedule Of payments
as now determined. thus preventing any
practical recommendations as to the
basis upon which loan to a potentially
solvent Germany could be devised.
'The English text, on the other hand
was susceptible of broader interpreta-
tion The committee, however impressed
with the Importance of the subject under
consideration, rather than report imme-
diately that no loan was possible under
the terms Of the reference, asked the
Reparations Commission to define ex-
actly the terms Of reference.
can answer was received which was
only supported by three OF the four MEM
bers Of the Preparations Commission, the
French member dissenting to the effect
that the committee should discuss all
questions which might have n bearing
upon the general reesta blishment of
Gcrmany's external credit.
"In the meantime. official statements
had been made in Paris to the effect that
the bankers committee was attempting
A..
obligation to the Preparations Commits
sion. and that this could not be tolera ted
by the French Government. The COM
mittee had never thought. and In this
agreed completely, that II had any power
TO pass upon the sums owing by the
German Government, but merely that It
had been requested to advise the Repara-
tions Commission as to n basis upon
which Germany could raise loan.
There had been no discussion of the
capital amounts OF reparations. but only
of a possible arrangement of the annual
payments. These annual payments
either In cash or in kind. are the only
method whereby Germany can effect
payment Of its just debts
II do not need to enlarge upon this as
IL liz fully stated In the published report
OF the committee to the commission.
'e"us w HesuFn any Itme.
'In view of the foregoing / was foroed
TO the reluctant conclusion that neither
OF the conditions stated above, which I
believe 20 be essential 10 a loan to Ger
many, could be complied with and that
no loan TO Germany OF the character
necessary In the situation could be
offered 20 and purchased by the AfnerI-
can investors. As II was 10 advise on
this point alone that was invited 10
serve on the committee by the Repara-
tions Commission. IL was necessary for
me 60 explain this fact TO the committee.
as / am not competent and am therefore
unwilling 20 advise on matters which
pertain solely to the European Govern
ments
II am now and shall continue 10 be
ready 20 do everything in my power 10
assist In the solution OF the problems
which confront the economic life OF
Europe, but I believe that In so far as
such problems depend for their solution
upon an international loan to Germany,
in which the Americah investor. would
take part, the solution II not possible
without n general settlement OF the
reparations question and only as a part
Of such settlement.
Undoubtedly settlement OF this
question involves the consideration and
arrangement Of many other questions
which must be settled between the Gov
ernments In order TO arrive at the