Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-03-18
STATE PARTMENT
SILENTLY APPROVES
BIG LOAN To FRANCE
BY DAVID LAWRENCE

copyright 1921
WASHINGTON, March Is. Fan
more significant than appears on the
surface is the Willingness of Ameri
can bankers to lend France 100000,
600 and the readiness of the United
States government to approve the
proposal indirectly.
The government takes no rcspon
sibility for any loans made by pIi-
waite bankers to foreign governments
or any dor este enterprise, however
worthy the motive but there does
exist an informal understanding be.
tween the bankers and the depart.
ment of state that no loans will De
made without giving the government.
here an opportunity to interpose an
objection. This policy was adopted
in order to prevent American funds
from being used to support armies
and naVies abroad, and as a ,heDnS
of diVerting money tu reconstruction
and commercial needs only.
Since that policy was announced
no large loans have been made to
Iany of the allied powers except ia
pan, who needed the money for re-
construction following the earth
quake. Loans to smaller countries
have been negotiated, but the loan
to France is the first since President
Harding and Secretary Hughes asked
the bankers to submit their loans to
the government for examination be-
fore being made.
The lending of 500. 600, 900 to
France is not in. itself u large trans
action, as loans have been reckoned
in the past, but being made at this
time when the experts are finishing
their reports on reparations and the
German budget it has a far-reaching
importance.
J. p. Morgan & Co. acted as fiscal
agents for the British government
before America entered the war, and
floated a large loan for France since
the war. Through their French
banking connections, they are KEPT
in close touch with affairs in Paris,
and they do not make a loan Of $780,.
100000 without assuring themselves
about the future of Frances finances.
The loan itself is an evidence of con-
fidenCe, and just now there can be
no confidence in the future of any
thing in Europe unless French policy
toward reparations is thoroughly de-
fined. There are reports that the
Morgan interests were assured that
the recommendation to be made by
the commission Of experts headed by
Charles C. Dawes will be accepted by
France. 1t will be recalled that J.
p. Morgan himself sat as an adviser
to the reDaratiOns committee two
years ago, and that the present eff
fort to compose the financial Stua-
ton in Europe is directly in line with
the advice 4he gave at the time.
If the Dawes report is accepted
and it looks as if it will be, as Of
ficials of the government here are
optmistic-the next step will be to
provide Il loan for Germany Out
Of that Ivan some advances in repa-
ration payments to the allies I'M
dOubtedly will be made. The loan
would have to be floated by private
bankers, too, and again the United
States government will have an OPP
portunity indirectly to approve. The
government has no legal right to OBJ
ject to any loans by private bankers,
but the weight of its disapproval is a
moral factor which few bankers
would care to incur.
Broadly speaking, the impression
one gets here, especially since the
Morgan loan was announced. is that
European affairs at last are on the
mend, and that important develop
ments may be looked for in the next
several months which may have
their reflex in increased purchases
of American farm products and man.
ufactured goods, because, as the fis-
cal situation is improved. foreign
currencies will have q greater pur
chasing power.