Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-06-04
GERMAN FINANCES

pOSSQ OF IcpI cSSAIl0eAvSS o
the allied powers participating IN
the late war, except only the United
States, has decided to give Germany
a rest during the remainder of the
year 1922. It will not have to pay
any installments of the stipulated
r~eparations during that time. The
decision was unanimous, so France
must be satisfied. Some time ago
the r%eparations committee served
an ultinnatum in Germany. 1t in
sisted that the German government
should stop issuing paper marks and
balance its budgets by heavier
taxes. It pointed out other ways
in which it could reduce expenses.
In fact it undertook to direct Ger
man government finances very much
as a credit association undertakes
to direct the business of a debtor
who is on the verge of bankruptcy,
and it made the price of compliance
a moratorium for 1922 plus assist
ance in the raising of an interna-
tional loan of a billion dollars for
Germany. The German reply to the
reparation committee was satistac-
tory to them in the main, though
there remain a few points yet to
discuss. But they are not import
ant, and the reparation commission
announces that beginning on the
tenth of this month the moratorium
will be in force and effect.
The international billion dollar
loan to Germany is to be a private
loan made through private bankers
and moi a government loan. The
governments of the United States,
Great Britain and other countries
where they hope to raise this money
would not stand for any more loans
collected by force from them
through taxes. They have had all
of that they want and then some
more. Eleven billion dollars OF
that sort of loans is now outstand-
ing and delinquent with small
chance of speedy collection so far
as the United States alone is con-
cerned. Graet Britain has as much
or more of the same sort OF loans
due her, with slim chances OF speedy
collection. So this new German loan
of a billion dollars is to be a private
business loan.
All the leading bankers of the
world have been discussing it. ].
Pierpont Morgan went to Europe
to take part in these discussions and
no doubt he will take charge of the
raising Of Americas share of it.
1t is probable that Americas share
of this billion dollar loan will be
the lions share. for we have the
cash in greater abundance than any
other country. We have the surplus
gold of the world in our strong
boxes.
We see no particular objection to
this participation in the German
loan On the part of ]. P%ierpont Nor
gan and the American bankers. If
they part with money of their own
or of their clients you may be sure
that the interest rate is high and the
security for repayment good. No
one in this country who has money
to invest need part with a penny of
it unless they wish to do So. Per-
haps a few rich Americans of Ger
mar birth may feel some urge of
sentiment to invest in a safe Ger
man loan to help out the mother
country, but the general reverse of
that sentiment will prevail and if
American capitalists buy German
bonds on the recommendation of ].
Pierpont Morgan & Co., it will be
because they think their capital in
vestment is safe, and that they can
get better wages for the capital in
Germany than they car get at home
or elsewhere in the world. There
is not much sentiment in money
loaning at best, and certainly the
average American will not lend it
abroad without strong inducements
in the way of high interests. We
loaned Norway and Denmark some
millions a short time ago at 8 per
cent. Our notion is that Germany
will have to pay that or lore. And
if the security is good she might
raise a lot of money in this country
if she is willing to bid high enough
for it.
The Chicago Daily Tribune in
commenting on this subject recent
ly said: