The Ocala evening star., 1922-06-15
THE GERMAN LOAN FIASCO
New York Tribune)

tNe"
Mr. J. P. Morgan's statement clears
up some confusion caused by earlier
reports from Paris as to the deadlock
on the German loan. 1t says that
there was a difference between the
French and English texts of the orig
inal note sent by the Reparation
Committee to the bankers committee.
The French text prohibited the COM
mittee from considering revision of
the schedule of German payments,
as now determined. The English
text was susceptible of broader in
depreciation. But it did not contem-
plate any alteration by the bankers,
even by way of suggestion, of the
principal due from Germany.
The commission alone may reduce
the capital amount, and then only by
a unanimous vote. France objected
to discussion by the bankers of even
changes in the matter of annual pay
ments. So when a majority of the
commission requested the bankers to
take the possibility of such changes
into account in reporting upon the
feasibility of loan the latter saw
that they were being drawn away
from the field of finance into the
fields of politics, and thought the best
to suspend their inquiry.
The bankers report takes notice of
the obvious difficulties in the way
of an advance to Germany. France
is Germany's chief creditor. She is
the major creditor. although she has
but one vote on the Reparation Com
mission. AS the report says, "In
any reparation problems. her inter-
ests are the most important factor"
France must bear the brunt of a
scaling down of German obligations.
Yet she has been ingenuously asked
by her allied associates to consent to
such scaling down at her expense
for Germany's benefit and for what
they consider their own benefit.
Frances position is logical and
honorable. She is willing to.reduce
Germany's debt to her if the other
Allies will respond by proportionate-
| ly reducing her debt to them. But
nearly all the maneuvering at recent
Allied conferences has had the aim
of forcing France to make conces-
sions without receiving any compen-
sation.
1t will be time to ask France to
cancel some of Germany's debt when
Great Britain and the United States
offer to cancel some of the French
debt to them. The one-sideness of
the cancellation suggestions made so
far is the main obstacle to the issue
of a private international loan to
Germany, on the assumption that
Germany is to be relieved of part
of her present reparation obligations.
The bankers found that there was
another obstacle. That is Germany's
low standing as a debtor. The Ger
mans have shown little willingness
|
has been conspicuously lacking in
the Reich's recent financing and
diplomacy The Germans now say
in effect: eve shall be glad to oc-
cept loan to help US pay our war
debts on the condition that our war
debts are scaled. Having received
the loan it would be natural fo1
them to say later: awe shall be glad
to pay the principal of this loan or
condition that it is scaled and that
you give US a new loan."
Who will trust a debtor without
character? 1t is clear that Ger
many will have to acquire character
and reputation for integrity before
the average foreign investor will
lend her money on the somewhat
violent assumption that there is any
virtue either in her word Or her bond
MOSS BLUFF