Evening star., 1922-05-28
Rate by MsIf-PayabIe in Advance.
The Loan to Germany.

Cable dispatches from Paris, where
International bankers are In confer
ence, indicate that the american peo-
ple are likely soon to be asked TO sub.
scribe TO a loan to Germany amount
ing to more than a billion dollars.
Flota ton of the loan is to be under
taken if the German government sub
scribes to the conditions laid down.
These include acceptance in full of
the terms of the ultimatum of the
reparations commission, which en-
pires May 81, and the giving of guar
antees that the imitation of German
currency will be stopped immediately
Between now and next Wednesday
the bankers, the United States being
represented by J. 2. Morgan, are TO
find out to what extent their respec-
tive countries can be expected to sub
scribe TO the loan.
Acceptance by the Germans of the
conditions and decision by the bank
ers to undertake the loan would bring
IL the United States one of the most
serious problems il has had to face
since the signing of the armistice. Ii
so large sum as a billion dollars or
more is to be loaned to Germany the
bulk of it will have to come from
American investors. That is SO ap-
parent that participation OF other
countries. except Great Britain. in
the consortium will be more Of a
q nd
Belgium and Italy may raise few
millions each but it takes a thousand
millions to make a billion, and the
United States is the only country in
the world which has lendable funds to
any such extent. With Europe al
ready owing this country nearly twen-
" billions of dollars for loans and
credits, the proposal that another bill.
lion dollars of American money shall
be invested there is one that calls for
the gravest consideration.
The understanding is that the pro-
ceeds of the proposed loan will be ap-
piled largely to the payment of repa-
rations, chiefly to France and Bel
Sium. Ii would amount, in fact, TO a
loan to France and Belgium, with
their reparations claims against Ger
many as security. In other words. 1t
would be a cashing of these claims
(which are uncashab!e in Germany
in the United States and in such other
countries as might participate in the
proposed loan. That being the case,
American investors will want to
know. and they will insist upon know
irg. what security is back of these
bad debts they are asked to take over.
The total bill of reparations against
Germany, under the terms of the Lon
don ultimatunl. amounts to thirty
three billion dollars, and constitutes
a first lien on all German assets. The
total of German wealth upon which
this mortgage lies is estimated at
twenty billions of dollars. or thirteen
billion dollars less than the claim. If
the loan it now is proposed to make
Germany is to be Saith billion
dollar lien on the twenty billions of
assets Americans will not participate
in the loan to the extent OF copper
pennies. If it is desired that Ameri-
can money shall be loaned to Ger
many in order that France and Bel
gium may collect reparations, the first
of several necessary conditions Is that
the proposed loan shall constitute a
lien on German assets prior to the
general thirty-three- billion dollar repa-
rations lien. 1t is not a gift horse
that is being offered American in
vestors. and not only are they going
to look the animal in the mouth. but
they are going to call in experts to
examine all its teeth with painstakins
care before any more American dol
lars are sent to Europe