The New York herald., 1922-12-20
LAMONT SAYS LOAN
TO GERMANY WON'T
Be FOR PREPARATIONS
No Chance for Action Until
Settlement Is Made
With Allies.
NO BILLION AND HALF
Tells Foreign Relations
Council Only Small Is
sue Is Considered.
PUBLICITY DEPRECATED
Officials Say Assumption Of
Help to Europe Is
l5u1r1clent.
PUBLICITY DEPRECATED

Thomas w. Lamont, partner OF the
firm OF ]. II. Morgan 4 Co.. made 1t
Gear last night at the dinner OF the
Council on Foreign Relations ut Sher-
rvs that not only Is no large loan TO
Germany contemplated now, but that
when a loan Is made 1t will be OF
small proportions and not intended to
enable Germany to meet her repara-
tions debts.
Mr.. Lamont was an added speaker
at the dinner. at which Eiihu Root
presided and where phases OF the -Eu-
Yopean situation were discussed. He
said: ~
Neither the firm Of which am a
member nor any other bankers are
about to make loan Of billion and
half to Germany. a
II want also to deny a report that one
of the newspapers brought to me to-day
that the State Department had sent the
German Ambassador to confer with Mr..
Morgan. The State Department did not
send the German Ambassador.
1.-THE papers have been llled with ar
ticles regarding a possible loan to Ger.
many and such a loan has been de-
scribed as II It were q panacea. There
Is nothing Of that kind existing In the
situation. %r
"When Mr.. Morgan and I told the
German Ambassador that loan was
impossible We did not refuse such loan,
but we gave the reasons why 1t was
,os, I<o ~.
reasons are patent to you. They do not
lie within the province Of the banker.
lie can only mobilize tho situation.
When We say that the loan IS impossi-
BILE we-mean that the sinre stors of this
country would not consider such n loan
and would not buy bonds Of Germany
at the present time. and we could not
In good faith recommend such invest
ment The reason Is that Germany is
not in any position at the present time
to inspire our people with confidence to
buy It's bonds.
Conditions for a Loan.
Bankers are unable to perceive the
possibility Of sucl, q loan at the present
time. The first thing on the program.
as the bankers view IT, Is the settle
fnent OF the reparations problem. the
fixing of a definite sum so that Ger
many WIN he aware Of her obligation.
Following the fixation of this sum Ger
many must set out on period OF def1a-
tion. There may possibly come with
That scheme OF the Allies for the
supervision OF such defiation, includ-
ing the administration OF Germany's
customs.
when those things are done. then !
can Imagine American investors will be
prepared to lend money to- Germany. not
on a gigantic scale. but enough to help
her over the hill. Even IL that is borne
in mind. l doubt that Germany will be
lent sum sufficient to disvbarge her
reparations debt.
~ ''All Of us have the utmost sympathy
for France. The investors of the United
States have confidence In the thrift of
the people Of France and they will be
glad to lend her on a large scale, but
10 not opine that the situation OF Ger
many In the near future will be such
that Germany will be enabled to borrow
money In order to take these sums and
repay her reraration Obligations.
THE Debt Refunding Commission. ball
has been referred to ms hampering our
relations TO our codebtors. It prevents
the Americans from showing to their
4 Allies what the spirit OF the people of
this country have It In their heart to
express
The original bill gave the Secretary
Of the Treasury the power to refund the
debts, but Congressional amendment
put this power into the hands OF . re-
-Indlng commission and provided that
The debt could be refunded X the entire
amount were paid I'm twenty-five years
and that an interest OF AZ per cent. be
fixed This is a hampering provision.
and until It is changed II viii be impos-
sible to arrive at satisfactory conciu-
sion with the government debtors on the
other side"
Mr.. Lamont also touched on the
conditions OF the debt refunding bill.
which make mandatory the payment
within twenty-five years Of the for
eign indebtedness, and said It was i'm
possible to deal with governments on
the other side until these conditions
had been changed. The same subject
had been spoken OF by John Foster
Dulles. who was member OF the
Preparations Commission.
Mr.. Dulles recalled that when the
Allies, at the time OF the peace con-
ference. had insisted upon putting war
costs into tho reparations provisions
of the peace settlement. President Viii
SUI, tnci OH MS way 10 tnc Dliteu
States, had been consulted and had
refused to consider such a thing. hold
iug II would be unfair and not COM
patible with the fourteen points.
Puts BI.me ON Wilson.
Later. In Paris. Mr.. Dulles said. Mr..
Wilson agreed to the inclusion Of pen
zion charges and reparation allow
snces. which the speaker said were
merely war costs In another guise. II
was the inclusion Iof these items. he
insisted. that destroyed German credit
and created the trouble over rnpara-
tons He said:
I'm my opinion America ought to
raLe hand In undoing what was due,
Confined on Ya~e aiy-