Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-12
Main Functions Of
Plan Barred for
First Time.
MAY HELP SETTLE
WORLD PROBLEMS
Project Is Product of
Three Months of Tn.
ceasing Labor.
BY LELAND STOWE.


81 Radio to The Star.
PARIS. May 1i.-For more than Two
months plans for the establishment of
a new and powerful international bank
ing institution of unprecedented scope
to manage and dominate all Germany's
future reparations payments have been
the outstanding task of the second
renarations conference.
The. proposed bank for interna tional
settlements will be inaugurated (if the
plans come to frlIition) as an entirely
new financial experiment on widespread
and far-reaching lines never before at
tempted in the history of the world. 1t
will stand out as the heart of and by
all odds the greatest achievement of
what will one day be known as the
Young plan, but even if the experts
fail to reach an agreement on the total
amount and duration of the annuities
to be paid by Germany this pioneer
conception of an international bank
will remain as the core and substance
and the most significant contribution
Of the Young committees report.
Project Is Outlined.
Following is an outline, published for
the first time and exclusively, of the
great bank project with details OF many
of its most important functions. which
will be of primary interest to bankers
the world over. This summary conSti-
tutes the first authentic f1rst-hand re-
port of what the experts have evolved
in their three months of unceaSing
labor. It amounts to an advance pres
Nf %l- -
plan. Emphasis should be laid on the
point that the scheme has been drafted,
redrafted and revised within the last
few weeks with all the painstaking care
Of the worlds foremost banking autI1ori-
ties. AS it stands 1t is actually part of
the final Young committee report, and
has been accepted not only in principle
but in almost every detail by the dele
gates of all the seven nations assembled
here, including those of Germany and
Japan It is still possible that it may be
revised here and there in Its wording,
and that slight changes may be made
in very minor details, but on the whole
that portion of the final report relative
to the outline and functions of the in
ternational bank is regarded as COM
plete in conference circles. It is virtual
iy certain that no important changes in
principle will be made in the banks out
line from now on, whether the experts
reach or fail to reach an accord on
reparations figures
It is intended that the international
bank scheme shall be recommended in
any case to all governments concerned
so that it may serve as a basis for any
future settlement which may have TO
be made. Therefore this carefully
drafted bank plan is significant as the
machinery unanimously agreed upon by
the Young committee experts as the
logical and necessary and highly val
liable successor 20 the Dawes plan.
Plan Clear and Concise.
The bank plan as now inserted into
the almost completed final Young report
(only those pages relative to the
amounts Of reparations agreed to- their
repartition and their duration are still
missing) is ~ pages in length and is
remarkably clear, concise and lucid. 1t
may well take its place in international
finance as a masterpiece of banking
craftsmanship. In crisp phraseology
the experts portray the essential func-
tions annuities, how 1t shall administer
arationS shall be paid into it, how it
shall place in the markets of the world
the mobilization portion of the repara-
tions annuities. How it shall administer
deliveries in kind and beyond that
what auxiliary functions 1t shall eXer-
else as an Independent banking house
what its relations shall be with the CEN
trsl banks of issue and what purely
commercial transactions operations it
shall be entitled to exercise,
Finally the question is examined as
to the capitalization the international
bank shall have and what the pros
poets of very considerable profits should
be. These latter points relative to the
banks banking and commercial oper-
stions, its capitalization and profits are
especially subjects in which bankers
everywhere will take the keenest
interest.
The experts begin with the presenta-
ton of general reasons for the con-
stitution of an institution with bank
ing functions" For the sake Of breV-
ity these and the following passages
will be summarized with direct quota
tions used only in the more important
paragraphs.
Reasons for Establishment.
The reasons given for the establish
ment Of bank of international set
Elements are as follows:
One, that since the general plan for
q complete and final settlement of the
reparations problem is primarily flnan-
cial in character it involves necessari-
~ the performance of certain banking
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