San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1924-03-16
u. S. Officials Think Next
Credit Will Be Made
to Germany.
s1OO,OOO,Oo0 INVOLVED
Loan Signifies Morgan's
Confidence in Europe's
Future.
BY DAVID LAWRENCE.

Copyright by The San Antonio Light.
Washington, ID. c.. March 15.-Far
more significant than appears on the
surface is the willingness of American
bankers to lend France 100000, 900
and the readiness of the United States
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 between the
bankers and the Department of State
that no loans will be made without Civ
ing the government here an opportun-
ity to interprose an objection. This
policy was adopted in order to prevent
American funds from being used to
support armies and navies abroad and
as means Of diverting money to re-
construction and commercial needs
only.
OF Great Importance.
Since that policy was announced
no large loans have been made to any
of the Allied powers except Japan who
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 S100,O00,000 to
France is not in itself 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 far reaching
importance.
j. L. Morgan & Co. acted as fiscal
agents for the British government be-
fore America entered the war and
floated large loan for France since
the war. Through their French bank
ing connections they are kept in close
touch with affairs in Paris and they
do not make loan of 100000 900
without assuring themselves about the
future of Frances finances.
Evidence g Confidence.
The loan itself is an evidence of
confidence and just now there can be
no confidence in the future of any
thing in Europe unless the French
policy toward reparatiOns is thor
oughly defined. There are reports that
the Morgan interests were assured
that the recommendations to be made
by the commission of experts headed
by Charles G. Dawes will be accepted
by France. 1t will be recalled that J..
Z. Morgan himself sat as an adviser
to the reparations commission two
years ago and that the present effort
to compose the financial situation in
Europe is directly in line with the ad-
vice he gave at the time.
If the Dawes report is accepted and
it looks as if it will be-officials of
the government here are optimistic
the next step will be to provide loan
for Germany. Out of that loan some
advances in reparation payments to
the Allies undoubtedly will be made.
The loan would have to be floated by
private bankers too, and again the
United States government will have an
opportunity 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 Nor
gan loan was announced, is that Eu-
ropean affairs at last are on the mend
and that important developments may
be looked for in the next several
months which may have their reflex in
increased purchases of American farm
products and manufactured goods be-
cause, as the fiscal situation is i'm
proved, foreign currencies will have q
greater purchasing power.