The Washington times., 1924-04-17
EXPERTS
STUDY GOLD
LOAN
Are Not Unanimous on Part
To Be Played by Marks
in Reparation Scheme.
BY w.. s. COUSINS
Copyright, 1924. by Ccsmopolitan
NAwa e1arvica


Copyright, 1894. by Cosmopolitan
News Service.)
NEW YORK, April 17.-American
banking experts who have made q
special study of the foreign gold
loan provisions Of the Dawes Repub-
lican plan are far from unanimous
on the part to be played by these
800, 100000 gold marks in the repa.
rations and rehabilitation scheme.
They are unanimous in their state
sents a lack Of clarity"--to use
tional banker, in dealing with the
proposed loan, especially the uses to
be made Of the proceeds.
Dawes Silent
/ Cable inquiries to General Dawes
and Owen Young, and to economists
working with them on the study Of
German financial conditions and
the resultant report, also failed to
elicit any satisfactory explanation
as to how the foreign gold loan
could be devoted entirely to repara.
ton payments in the first Qbudget
moratorium year and still contri.
butte to the founding Of the new
bank Of issue and the stabilizing
of German currency.
General Dawes declined to COM
ment further on the report, but
one OF the experts close to him in
his special task declared that the
gold mrak loan to Germany Is to
be used: First, to create the gold
capital for the new bank OF issue:
then for purchases for payment Of
reparations in kind. But since pur-
chases for payment in kind must
be made within Germany, the money
does not leave Germany and the
proceeds of the loan are to be kept
within the German bank"
This Ia an evident confusion Of
the function Of capital and deposits
in that or any bank. The annex to
the Dawes report shows very clearly
that the 100000 shares Of the new
bank of issue are to be offered for
sale Gin Germany and abroad" and
this enterprise can therefore have
no relation to bonds offered in con.
nection with the gold loan. In
other words, It IL a distinct matter,
insofar as investment in the bank is
concerned. Cash deposits is an
entirely different matter.
British Interpretation.
British official interpretation Of
the foreign gold loan, according to
our London correspondent, is that
the major portion of the loan will
be used to establish" the bank,
% per cent for financing German
external credits, and the remainder
used for payments due from Ger
many for the costs OF the armies
OF occupation; none going directly
to PREPARATION payments. But this
Is in such direct variance with the
official text of the Dawes report
that It is difficult to see how such
deductions could have been made.
Moreover, Uncle Sans bill alone
for expense of his small army of
occupation to date is $3.50, 900 200,
approximately 1,000,O00,0OO gold
marks.
II foreign currency is needed to
"sprout" the new German bank, it
might reasonably be asked why the
1900, 100000 gold marks equivalent
Of foreign currency discovered in
Germany by the McKenna COM
mittee could not be utilized for the
purpose. Here is an item exceeding
in value the whole amount Of the
proposed foreign loan, I'm con.
venient form for conversion into
foreign assets" according to Nc
Kenna.
American bankers do not take
kindly to the suggestion that they
underwrite a $500, 100000 foreign
reparation loan to raise a fund to
be turned over to the French"-to
use the phrase Of another banker.
Such a proposal would defeat the
plan, he said, insofar as American
participation is concerned.