Evening star., 1922-06-11
BANKERS EXPLAIN
DELAY IN MAKING
LOAN TO GERMANY

CONTINUED from First Page.)
cuss in any way matters under their
control. but as a banker. engaged In
the distribution of securities In the
investment markets OF the United
States and only representing those
markets in so far as their condition
might permit.
Il explained at the first meeting
of the committee that there is no
interest In the United States In a
loan to Germany per Sc. There Is,
however. in my opinion, growing
appreciation in the United states of
the fact that its own prosperity Is
to a degree dependent upon the pros
perity of the allied nations and that
the prosperity of the latter is, In,
large degree, dependent upon the
rehabilitation of Germany's credit
Could Interest Americans.
II, consequently, believed that the
Anne. ican banker and investor coulo
be interested to a substantial de-
gree in the purchase of German OBJ
legations If two fundamental condi-
tions were satisfactorily esta
"First-Such a loan should be at
the request and would be for 1ne
benefit of the allied nations; rms
could be in no way better expressed
than by the active cooperation or
the private bankers of the allied
countries in the distribution OF tne
German securities to their NATIONALS
"Second-Through the technical Sc,
curity to be given by GERMANY ana
the rehabilitation of its internal
financial situation. Germany should
clearly show a desire to meet Its OBJ
Neations in the hope that by the fui-
fillment of that obligation IT could re-
establish its credit as one OF the com :
n.ercial nations of the world.
shortly stated. therefore, the two
fundamental conditions of American
participation were. in my opinion
unaniniity among its leaders and the
Of the credit OF the bor-
rover.
AnrIo-French Differences.
EARLY in the discussions OF the
committee it became apparent 1nat
there was a difference between the
English and French texts of the ref
erence from the reparations commits
sion to the bankers committee. Thls
difference touched the very root OF the
matter in that the French reading
definitely prohibited the committee
from giving consideration to the
schedule of payments as now oe-
termined, thus preventing any prac-
tical recommendations as to the basis
upon which a loan. to potentially
solvent Germany could be devised.
The English text. on the other hand,
was susceptible of a broader inter-
probation. The committee, however,
Impressed with the Importance OF the
subject under consideration, rather
than report Immediately that no loan
was possible under the terms or the
reference, asked the reparations COM
mission to define exactly the terms OF
reference. An answer was received
which was only supported by three
n a
tions commission. the French mem
ber dissenting. TO the effect that the
committee should discuss all ques-
tions which might have bearing
upon the general re-establishment or
Germany's external credit:
in the. meantime. officiai state
ments had been made in Paris to
the effect that the bankers commit
tee was attempting to decrease the
amount of the German obligation
to tire reparations commission ana
that this could not be tolerated by
mittee had never thought, and in
this I agreed completely. that 1t
had any power to pass upon the
sums owing by the German govern
ment. but merely that it had been
requested to advise the reparattons
commission as to a basis upon which
Germany could raise a loan: There
had been no discussion of the capi-
tai amounts of reparations but only
of a possible arrangement OF the an
nual payments. These annual pay
ments, either in cash or in kind,
are the only method whereby Ger
many can effect payment of its just
debts.
Neither Condition Met.
II do not need to enlarge upon
this, as it is fully stated in the pub
lished report OF the committee to
the commission.
I'm view of the foregoing I am
that neither of the conditions stated
above, which l believe to be essential
to a loan to Germany, could be COM
piled with and that no loan to Ger
many Of the character necessary in
the situation could be offered to anu
AS 1t was to advise on this point
alone that / was invited to serve
on the committee by the reparations
commission, it was necessary for me
to explain this fact to the commit
tee, as 1 am not competent and am
therefore unwilling to advise on mat
ters which pertain solely to the Euro
pean governments.
II am now and shall continue to
be ready to do everything in my
power to assist in the solution Of
the problems which confront the
lieve that in so far as such problems
depend for their solution upon an
international loan to Germany, in
which the American investor would
take part. the solution is not possible
without a general settlement of the
reparations question and only as a
part of such settlement. Undoubt-
edly. q settlement of this question
involves the consideration and ar
rangement Of many other questions
which must be settled between the
governments in order to arrive at
the unanimity required for the first
condition Of a loan.
IT shall, of course, as have stated
to the reparations commission. be
ready at any time to return and do
anything in my power when condi-
tions permit and the commission may