Evening star., 1924-03-15
SIGNIFICANCE SEEN
lin LOAN TO FRANCE
Reports Morgans Were As.
sured Country Will Accept
Reparation Advice.
BY DAVID LAWRENCE.

Far more significant than appears
on the surface is the Willingness Of
American bankers to lend France
800, 100000 and the readiness of the
United States government to approve
the proposal indirectly.
The government takes no response
bility for any loans made by private
bankers to foreign governments or
any domestic enterprise, however
worthy the motive, but there does
exist an informal understanding he
tween the bankers and the Depart
ment of State that no loans will be
made without giving the government
here an opportunity to interpose an
objection. This policy was adopted
10 prevent American funds from be-
ing used to support armies and ma
vieS abroad, and rs means OF di-
yerting money tn reconstruction and
commercial! needs only.
Policy Of Harding and Hughes.
Since that policy was announced no
large loans have been made to any of
the allied powers except Japan. which
needed the money for reconstruction
following the earthquake. 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 ex-
animation before being made.
The lending of 100000, 900 to France
Is not in itself Z large transaction 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
Las far-reaching Importance.
Keep In Close Touch.
]. p. Morgan & Co. acted as fiscal
agents for the British government be-
fore America entered. the war, and
tioated a large loan for France since
the war
Through their French banking
touch with affairs in Paris and they
do not make z loan of 100000 600
without assuring themselves about
the future of Frances finances.
The loan itself is an evidence of
confidence. and just now there can
he no coufidence in the future of any
thing in Europe unless French policy
toward reparations is thoroughly de-
fined
There are reports that the Nor
gan interests were assured that the
recomme ndations to be made by the
commission 0f experts. headed by
Charles G. Dawes. will be accepted
by France. IL will be recalled that
j. Il. Morgan himself sat as an Ad-
wiser to the rsparatiors commission
Two years ago. and that the present
effort To compose the financial situa-
ton in Europe is directly in line with
the advice he gave at the time.
German Loan Forecast.
If the Dawes report is accepted
and it looks as if it will be-ofti-
Gals OF the government here are
optimistic the next step will be to
provide a loan for Germany. Out
Of that loan some advances in repar.l-
tiOn payments to the allies undoubt-
edly will he made. The loan would
have to be fioate1l by private bank
ers, too, and again the United States
government will have ;Ln opportunity
indirectly TO approve. The govern
ment has no legal right to object
to any loans by private bankers, but
the weight Of iLs disapprovai Is a
moral factor which few bankers
would care to incur
Hold Conditions Are Improving.
Broadly speak king. 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
nsentS may be looked for in the next
several NOR tbs which may have their
reflex in increased purchases of Amer
iCan farm products and manufactured
goods because, as the fiS.-aI situation
is improved, foreign currencies will
have a greater purchasing power.
Copyright, 1874