New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-06-11
Unanimiiy Among Allics
and Establishment &C
German Credit Held TO
Be Essential Facto"s
Both Found To Be
Impossible Now
No Program Practicable
Without Consideration
of Reparations, Which
Paris Would Not Permit


Participation Of American financial
interests IN the settlement Of econo-
mic problems OF Europe, in 50 far 40
an international loan Is concerned. is
not possible without a general adjust
ment Of the reparations question. in tho
view Of J. P. Morgan, one Of the inter-
Allied bankers who have been consider
ing the German loan question IN Paris,
Mr.. Morgan's views are incorporated
in a lengthy statement which he eabled
from Paris yesterday after the bankers
had abandoned temporarily efforts 20
propose a basis for aiding Germany
financially. The statement was sent by
Mr.. Morgan to his banking ofaee In
New York and given out there In type
written form.
Mr. Morgan asserts that two eondi.
tions are necessary before America
can participate In the purchase Of
German securities, unanimity among
the leaders, that Is, the Allied coun'
tries. and the establishment Of the
credit Of the borrower. Germany
Neither Of these conditions. he says
was seen to be possible at the bankers
meeting.
Failure Definitely Explained
The statement Is the first complets
and Official account yet made avallaole
~ inside reasons as % why the loan
proposal failed, and particularly Of the
American viewpoint at the council of
bankers.
ment follows;
"When I was invited BY the kcpara-
tion Commission 70 serve on the bank
ors' committee had some hesitation IN
accepting, as il appeared that pnder
the terms OF the reference ! could ae-
complish little more BY coming 20
Paris than by cable advice from nc"
York. Upon further eonsidsFaiionl
however / felt that the matter was OK
sueh enormous importance 70 Europe
and also 10 the United States because
of their commercial relations with El-
rope I could not well refuse. Ihete-
fore. In the hope that something con-
structlye could be arrived az, J came
purely as a private citizen, holding no
authority from my government to dis-
cnss in anv way matters under tneif
eontrol. but as a banker engaged IN the
distribution Of securities IN the invest,
ment markets Of the United states, ana
only representing those markets IN 50
FAR as their condition might permit.
"I explained at the first meeting OF
the committee that there is no interes.
In the United states in a loan 20 Ger
many per sc. There is, however, IN my
opinion. a growing appreciation IN the
limited States Of the fact that its own
nrosperity is 20 degree Dependent
nnon the prosperity Of the Allied ma
tions. and that the prosperity OF inc
latter Is in a large degree dependent
upon the rehabilitation Of German
credit.
Fundamental Condition Stated
81 consequently believed that the
American banker and investor could
be interested 10 a substantial degree N
the purchase OF German obligations Il
two fundamental conditions were sat
isfactorily established.
"First-Sueh loan should be az the
request and would be for the benefit OF
the Allied nations. Tbs could be IN no
way better expressed than b. the active
cooperation OF the private bankers OF
the Allied countries IN the distribution
Of the German securities 10 their own
nationals.
"second-Through the technical Sc
eurity 10 be given by Germany ana IN,
rehabilitation Of It's internal hnaneial
situation, Germany should clearly sho"
A desire 20 meet It's obligations IN tno
hope that by the fulhllment OF these
obligations II could re-establish It's
credit as one Of the commercial natlons
Of the world.
"Shortly stated, therefore, the two
fundamental conditions Of American
participation were, in my opinion, unan-
imity among the lenders and the es,ao-
lishment Of the credit OF the Dor
rover.
early In the discussions Of the COM
mittee il became apparent that there
was A difference between the Enghsn
and French texts Of the reference from
the Reparation Commission 70 tns
bankors' committee, This dinerenss
touched the very root Of the matter IN
hat the French reading definitely pro-
hibited the COMMITTEES from giving con-
alteration 20 the schedule OF payments
as now determined, thus preventing
anv practical recommendations as 70
the basis upon which a loan 70 poten-
tally solvent Germany could De ae-
yised. The English text, on the, otner
hand, was susceptible OF broader IN
terpretation. The committee, howeyeL
impressed with the importance OF "
subject under consideration, ratneg
than report Immediately that no loan
was possible under the terms Oh tne
reference, asked the Reparation Com.
mission 10 define exactly the terms OF
reference. An answer was received
which was only supported by three oi
the four members Of the Keparation
Commission, the French dissenting 70
the effect that the committee snoula
discuss ali questions which might have
a bearing upon the general fe-estao'
lishment OF Germany's external ered'I
Paris Issues Ultimstum
"In the meantime, Official statements
had been made in Paris 20 the eject
that the bankers' COMMITTEES was at
tempting 20 decrease the amount Of the
German obligation 10 the Reparation
Commission and that this could not
be tolerated by the French govern
ment. The committee had never
thought, anu - this | agreed COM
pletely, that 1t had any power 70 pass
upon the sums owing by the German
| government, but merely that II had
heen reouested to adxlse tts Rapar2.