Evening star. [volume] (Washington, D.C.) 1854-1972, 1922-05-13
VANDERBILT WARNS
OF GERMAN LOAN
CONTINUED from First Page.)

steps Of far-reaching Importance 70
American industry and commerce
recalls hitherto unpublished Incl
dent which illustrates how far
sighted bankers can be-.
Just two months before the armis-
tice Of 1918 Thomas w. Lamont, a
member Of the Arm Of ]. P. Morgan
& Co.. visited the White House and had
q long talk with President Wilson about
the possibilities of world economic re-
construction should the war come to an
end On the train to New York Mr..
Lamont said to this correspondent:
The war isn't over and 1 sup
pose 1t would create great con-
sternation to say it, but when the
war Is over and Germany has to
pay big indemnity. you will find
Germany to pay her indemnify
"Do you mean that the United
States will do such a thing"
Recalls 1870 Precedent.
Yes. the people Of America and
Great Britain have the money to
lend. I suppose 1t sounds fantastic
that we should loan our enemies the
money. but that's what will happen.
I have just been reading what oc-
Cured after the Franco-German war
Of 1870. At that time France had
to pay Germany and she borrowed the
money and the investors in the other
European countries, including Ger
many herself, lent that money. 1t
may not be popular to write about
it now. but put 1t in the back of your
mind for future use"
Mr.. Lamont foresaw. therefore, as
early as September, 1918. the pros
pect or an international loan. Nearly
four years have elapsed since then
and the problem of Germany indemni i.
~
Tho reparations commission created
by the Versailles treaty is supposed
to regulate the flow of. German pay
ments The commission knows Ger
many can't pay at once or even
periodically without some sort of a
loan. Bankers Of all countries have
been invited to give their advice.
Thomas W. Lamont, who is already
in Europe, and together they will
advise what can be done with an in
ternational loan II fioated in America
Certain assurances will have to be
given of stability in Europe, other
wise American investors will not feel
safe in lending their money. That
means some definite understanding
between France and Germany so that
the reparations question will not be
a constant source of worry and ir-
ritation. And when once arrange
mentS are maze LOT Germany TO DOT
row the money whefewith to pay
her indemnity. the allied countries
will be benefited because the money
they receive will help to reduce their
burdens of internal taxation and
business and commerce will be
stimulated.
0verspeculated In 1870.
Curiously enough. the danger in the
future doesn't lie on the side Of the
defeated country-Germany.I 1t works
Just the other way. The victorious
countries are in danger Of over
speculation as a result of the flow
of indemnity money in their direc-
ton. History of the period imme-
diately following the Franco-German
war Of 1870 shows that Germany. the
victor. suffered a serious financial
and economic crisis because her in.
dustries promptly began to expand
on an extravagant basis and the in
coming funds stimulated unwise
speculation. The government itself
spent it's money for public enter
prises, which were paid for at high
rates of wages and at absurdly high