The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-10-09
GERMAN LOANS
DISAPPROVED
BY COUSINS
BY w. s. COUSINS,
international News Service

WV 4Ohh, Oct. S.-A meflca II
bankers sojourning in Germany
promptly spiked the rumors float.
Ing around in the European capitals
10 the effect that American invest
ment markets would absorb the
$4,000 900, 900 or more of repara ton
bonds issued by authorization of
the Dawes reparation scheme on
the security of the German indus.
trlal and railroad companies
1t has become almost habitual
for strategists and commissioners
of all kinds. pow-wowing in Europe
on one subject or another, to wind
mp the deliberations with q broad
cast to the world on some new pro-
posals for solving the geratest prob
lem in the world today. that OF
repara tons and war debts.
As Uncle Sam dug down and pro-
vided the bulk of the gold for the
prosecution of the war after join
ing the European allies In 1917.
he IL again expected to pad the rolls
In the final process of settling the
war claims.
A Simple Proposition
The war debt matter is a simple
Proposition. involving the good
IN afford to repudiate their ac-
knowledGed obliga tons. During
and after the war We loaned the
European countries ten billions of
dollars. and we are now ready to
settle for duly executed but unse-
cured promises.to-pay, worth at
current interest rates approximate
~ four and a half billion dollars.
With the exception of France. pfac-
tically all Of the Responsible ma
tions of Europe have signed agree
nnents 10 settle and are dutifully
CARRYING them ont. France has al
ways been inclined to await the def
rite payment to her of German repa.
ration money. or attempt to strike
bargain whereby our Government &C.
cepts Germany's Endorsement as full
discharge of her obligation.
The pet theory OF the star dip
Iomats on the other side of the
ocean land on this side as welD is
that the United States Govern
n1ent. either directly or through
distribution to American investors.
should take over the $4,000 900. 600
OF German Industrial and railroad
bonds issued under the Dawes plan
and by that act release France and
all other European countries rom
their ohIiga tons for money bor-
rowed during and after the war
Not Very Attractive
What are these bonds and are
they not of such caiibre az to make
them attractive in the investment
markets of the world? They are
the direct obligation OF the Ger
man corporations with the lacking
and financial Endorsement of the
German government behind them.
and from all appearances should
rank as a first class bond. 1t
makes little difference to the in
weston IL the first mortgage he
holds is the obligation OF a highly
urofjta Incorporated concern. so long
a. the security behind the bond is
ample to discharge the obligation.
Could the German railroads and
Industrial companies be sold in the
event of defa ult on the interest or
InstalIment payments on the bonds.
Theoretically. yes; practically, no.
for how could an outsid nation
proceed with the foreclosure OF
property on so vast a scale. The
German corporations and railroads
are of service to Germans alone
and foreclosure Is OnlnlHkdDle AI"ih
the standpoint OF the outsider, no
matter how valid his claim.
Long Way Off
There is of course another inn
portant reason why the American
Government and the American in
vestors must refuse TO accept Ger
man repara ton bonds. There is
little hope that they can be liqui-
dated short OF two or three gener-
stionz. and the German progeny Of
the present genera ton will not take
kindly 10 paying for the mistakes
OF their fathers and grsndfathers
who brought this great calamity
upon the world.