The New York herald., 1922-06-11

! advise that an external loan is feasible
! Having regard. however. TO this neg
alive conclusion. the committse. while
feeling unable to accept the majority in
vitation of the commission to examine
in detail the wider problem. consider
that thsy may usefully add the follow
| ing general observations upon IT:
"(a) An essential condition of an ex-
ternal loan at any time is that the pub
lie should feel that Germany is herself
making a real and substantial effort to
/ place her public finances upon a stable
basis. 1t is of the greatest Importance
that. through the technical security to
be given by Germany in the rehabilita-
tion of her financial situation, she shouIa
clearly show desire to meet her op-
| legations. in the hope that by the full
fiilment OF these obligations she will re-
establish her credit.
| "(b) second essential condition is
that dealt with in detail above, viz.
removal OF the present uncertainty re-
garding reparation obligations
"to) The committee had before them
she statement that American bankers
tand investors could In these circum-
! stances be interested ~ substantial
degree in the purchase o. s&arman obli-
cations but only IL one further funda-
mental condition was satisfied namely,
that such a loan should be at the unani-
nous request and for the benefit OF the
allied nations. This unanifnity could be
In no way better expressed than by the
active cooperation of the bankers OF the
allied and neutral countries in the dis
tribution Of securities to their own ma
tionals.
among the fundamental conditions
OF American participation therefore was
iunani:nity among the leaders as we'll as
the establishment of the credit Of the
borrower.
Committee Could Only, Advise.
I'D Most of the members OF the
committee are well aware that any
advice of theirs. while 1t might have
assisted. could not in itself have se-
cured these conditions They fully
realize, for example. that II they
of loan limitation Of Germany's an
nual payments. the countries con-
cerned In considering the effect on their
financial situation would necessarily
have in mind their own external in
debtedness. They realize that a solu-
ton. however desirable in itself. might
In fact prove to be impracticable unless
1t were preliminary to other financial
adjustments.
M
accentuates the burden of Germany's
obligations is also serious factor in
the case Of the external public debts
of the allied countries. In this con-
nection the committee desires to recall
that in considering the conditions of
the reestablishment of Germanys gen.
eral credit they regard certainty as es-
sential; mere leniency in enforcement,
such as the commission may show with
out modifying the total obligation, is
not sufficient.
Such questions, however. as inter-
allied Indebtedness are outside their
competence and cannot therefore be dis
cussed here But the committee cannot
ignore the fact that In the minds of
those who consider any adjustments
Of reparation obligations they are
bound to be discussed and that they are
among the factors in the problem Of
securing that desirable allied agree
ment. which they consider one of the
essential conditions Of loan to
Germany.
'In this connection they have in mind
the consistent principle contained in the
advice of economists and financial ex-
rerts since the memorandum submitted
n January 15. 1920. to the Governments
of the several European countries and
.he United States, principles which were
accepted by the Brussels financial con-
ference from September to October. 1920,
and have recently been indorsed by the
Genoa conference Of 1922
tTn conclusion, IL the committee felt
obliged to be discouraSing as to the
respects of loan In the present posi-
ton OF Germany's credit, they desire TO
be no less emphatic In stating their
conviction that, provided necessary con-
Fdftiohs for the revival OF her credit can
be realized. substantial loans could be
successfully flosted in all the main mar
kets OF tho world.
Purely financial conditions are now
definitely favorable to the issue of such
loans. more favorable than at any time
eince the war. The committee wish to
assure the commission that 1t Is their
earnest desire to do everything in their
power to assist In raising such loans II
the conditions to which they have re-
ferred can be secured.
'"They are deeply conscious OF the
immense assistance to the economic re-
covery OF the whole world which would
be afforded by a gradual conversion of
Germanys obligation from a debt to
Governments into debt to private in
vestors, based. like other public debts,
the general credit of the debtor country.
They believe. indeed. that the resump-
tion OF normal conditions between coun-
tries and the stabilization OF exchanges
are impossible without a definite settle
ment of the reparation payments. as of
other external public debts.
Promise Future Hope.
"If at any time. therefore, the CON-
mission Is able to repeat by unanimous
decision the invitation which now has
been extended by the majority the COM
nittee will be glad to meet again and
resume the inquiry which has now been
interrupted They cannot conjecture
whether the allied governments would
be able TO accept the necessary condi-
tions. but II so they repeat that they
are hopeful that substantial loans could
be raised.
Finally tho committee desire to point
out that in the meantime. and even
during the interval between such re-
newed invitation and the conclusion
Of subsequent negotiations. Germany's
financial position may obviously be
threatened with serious danger. pro-
tracted negotiations. for a large. long
term loan might mature too hate IL not
preceded by immediate help. But IL
the problem were considered anew In
the improved circumstances suggested
and with a real prospect Of an ulti-
mate settlement the committee feel that
the obstacles which at present con-
front an interim loan would probably
rof t,rove IN be fnsurerable.