Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-27
BOND
SALES OUTLINED
Draft Trust Plan of Reynolds
Committee Is Finally
Revealed.
BY Gable to The star.

PARIS, November 27.-Importsnt
specific provisions relative to the issu-
ance and marketing of the reparaticn
bonds provided for in the Young plan
are among the contents of the draft
trust agreement which the Reynolds
committee drew up and signed in the
course of its six-week conference re-
Gently at Baden-Baden.
The final and complete text of this
trust agreement, which describes all the
activities OF the Bank for Information
Settlements in its capacity 20 receive
and disburse the German reparation
annuities as agent for the creditor gov
ernments. has been obtained for publ
cation for the first time. The document
is subject to approval by tho principal
governments to be represented in the
second Hague conference scheduled for
January.
This failure to publish the agreement
led to reports that it contained some
unexpected provisions. It was known
that some of the sharpeSt clashes of
opinion in the bank organization COM
mittees sessions came during the dis
cuSSionS of certain passages OF this
special trust accord.
Agreement withheld.
The international bank organization
committee, headed by Jackson e.
Reynolds, president of the First Ma
tional Bank of New York, drew up and
signed three documents-the institu-
tion's charter. its statutes and the spe-
cial trust agreement At the close OF its
sittings the group issued for publication
the text of the charter and statutes, but
withheld tbs trust agreement on the
ground that the governments con-
cerned had not yet had opportunity to
study the document.
Study Of the full text shows that, in
general, the Reynolds experts followed
the suggestions made by the Young
committee. The provisions, however,
are more detailed and much more tech
nical In form. The printed text in
English nils II pages.
The sections Of the agreement relat-
ing to the issuance and marketing of
reparation bonds are of especial inter-
est to America at this time, because of
the recent strengthening of the New
York bond market, with its promise
that that market will be able to alb
serb bigger blocks Of reparation bonds
than appeared likely at the time when
the Young committee completed its
work last June.
Bond Issuance and Marketing.
The principal provisions relative to
the issuance and marketing Of bonds
are contained In Article XII. One Of
the essential provisions of the Young
plan, it should be recalled, is that the
German annuities should be divided into
two categortes, one to be paid by Ger
many under all conditions and the 9TH
er subject to poStponement under GER
tain circumstances. Only the non-post
porlable category, 1t is evident, Is to any
considerable degree suitable for MOBILE
zation.
1t is provided in Article XII of the
trust agreement that the bank, as trus-
tee, will be guided in matters relative
to mobilization Of annuities ''Sy the
provisions of the (Young) plan which
govern mobilization" The draft then
goes on to list nine specific provisions
to guide the trustee in mobilization ac-
tivities
The bank. asltrustee, will inform the
creditor governments when Is seems
practically possible" to proceed with
the issue Of bonds.
Upon the request of the creditor GOV
ernments, or any one OF them, for the
creation of bonds. the trustee shall, If
it sees flt, give to ali. the creditor
poStponable annuities opportunity to
ask for the creation Of such bonds for
their part severally."
ReparatiOn Bond Blocks. S
The marketing Of blocks of repara-
ton bonds in America win be governed
by the following clause:
If one or more OF the governments
concerned propose an international
issue on other markets than their own
respective market the trustee, If 1t con-
siders after examination that n1arkes
conditions justify such opera ton, shall :
take measures to proceed with the issue
OF these bonds and to determine, after
making sure that the central banks
concerned have no objection. the mar
kets on which such offers may be
made"
Another clause Of this article having
specific interest for America reads:
The trustee declares its willingness
to act as trustee or representative OF
the bondholders or as agent for all
issues OF bonds made in pursuance OF
the provisions of the plan relative to
mobilization to the extent provided in
the loan contract to be concluded be-
tween the trustee and the governments
concerned on the occasion of the issue
of such obligation"
Other articles Of the draft agreement
provide for the procedure in case of
poStponement or part OF the annuity
payments by Germany, and still others
provide for the bookkeeping arrange
mentS OF the bank as trustee.
(Coryright, 1921