Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-09-18
u. s. D|SAPPROvES
PREPARATION BONDS
Plan Seen to Saddle America
With German 0bIiga-
tionS.
BY FREDERIC WILLIAM VILE.

ia EREDkZnAS WILLIAM tvAAks
On the highest Washington authority
1t can be foreshadowed that the latest
European plans to "commercialize" the
German reparation bonds, /. e., to mar
ket them in the United States and thus
pay Germanys creditors with American
cash, are doomed in advance to fail.
The Coolidge administrators mind on
this subject is made up. AS long as 1t
remains in power, namely, until March,
1929. there is no prospect whatever that
the schemes now under way IN Geneva
will succeed.
It goes without saying that the big
Six" commission of inquiry, just formed
among Great Britain, France, Italy,
Belgium, Japan and Germany, to de-
wise a new Dawes plan," has not an
nounced its purpose to shift the repara-
tions burden from German to American
shoulders. But the commissions pro-
gram to study the possibility OF COM
mercializing the reparation bonds" is
regarded at Washington as transparent
ly plain. Commercializing the bonds
means marketing them. Marketing them
ySeans selling them in the only place
e. huge financial flotation is possible.
That place is the United States.
Demands Evacuation.
The sudden emergence of the repara-
tion ,ssue is due to the demand of the
Gerlfsn government for withdrawal OF
the allied troops still in the Rhineland.
Until this is done the Germans claim
there can be NJ real reconciliation with
France or any Fl n, foundation for peace
In Europe. This treaty of Versailles
authorized the allies to camp on Ger
man soil for Is years. If Germany
lived up to her obligations the Cologne
area was to be evacuated in 1925, the
Coblenz area in 1880 and the Mayence
area in 1885. But if Germany met all
Its obligations prior to 1885 the allied
troops were to be withdrawn Immediate
ly. Up to the present date only the
Cologne area has actually been evac-
hated.
Representatives of Germany and her
former enemies have just concluded
conference on Rhineland evacuation at
Geneva, which ended in denial OF the
German request for complete with
drawal of allied troops. 1t was decided
to subject the joint question of evacua-
ton and reparation obligations to
thorough scrutiny, with view to Serv-
ing the interests of all concerned. Gen.
eva dispatches indicate that one OF the
SI1l1lRS 10 WHICH tIlC COulIIilooAOA Va III
Quiry will give prompt attention Is the
marketing by the Germans of the rail-
way and industrial bonds upon which
interest is now being paid under the
Dawes plan. If this could be done, it is
estimated that the sum of IL 900 .00OO00
gold marks or roundly $2,750,000, 900,
would be placed in allied hands.
Government Opposed.
No money market in the world at the
present time is remotely capable of alb
Sorbing an issue Of nearly $4,000, 000,0 900
in bonds except the American market.
But even if high finance in the United
States were inclined to underwrite SO
colossal transaction, the Government
at Washington would not approve 1t.
Some five months ago feelers were put
out designed to elicit the Coolidge ad-
ministrations point of view. It was
promptly forthcoming and was to the
effect that any project to commercial
ize" German reparation bonds in this
country is looked upon as q subtle
scheme to saddle the whole business of
German reparations on the broad
shoulders of Uncle Sam. The net re-
suit would be that the United States
would have thrust upon it the response
bility of seeing that reparationS were
paid. As a distinguished Washington
official puts it, we would become, in eff
feet, the worlds bailiff, as far as Ger
many is concerned
American money is already financing
Germany on an enormous scale. In 1927
the total loaned to that country was
$213,047, 500 for commercial and indus
trial enterprises and $72, 185, 200 to state
and municipal governments. Nearly As
per cent Of all American capital invest
ed in Europe last year was sent to Ger
many. 1t is plain from such figures
that, entirely apart from official WASH
3ngton objections, the fiotation Of Ger
man reparation obligations In the
United States would be fraught with
serious difficulties.
Rebuff awaits allied Europe, too, II
1t thinks Of linking German reparations
with allied war debts owing to the
United States. Repeatedly it has been
affirmed at Washington that these are
wholly distinct affairs, with one of
Observation-Disclosures has moth.
ing whatever to do This remains the
attitude of the administration and of
Congress alike
tCopyright, 1929