Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-20
GILBERT MAY Join
OHOUSE OF MORGAN
49, Year. old Financial Expert
Has Completed Repara-
tons Task. 4
BY JOHN r. SINCLAIR.

II
!, turned over about $4,000, 900 to the In
,,ternational Bank on Saturday, and left
Berlin quietly for the United States, he
had completed one Of the greatest tasks
OF financial craftsmanship ever at
tempted by any man, young or old.
,s During his five years as agent gen
eral for reparations payments he col
eslected from Germany and transferred
to the former allies, in cash ana goods,
more than 100000, 900.
al Although he could have headed tne
new Bank for International settlements
this young lawyer-banker refused the
offer. turned over his great trust ana
hacked his trunk for New York.
!, At first there was objection 70 ms
being paid $4,000 a year as head OF the
Preparations work, but 1t soon died away.
The presidency Of the new !nterna-
tional Bank pays $4,000 annually.
!, will Parker Gilbert return to law, In
which he was a conspicuous success be-
fore entering the United States Treas
'.ury IL years ago? Then he became
counsel in war-loan matters, and later
was appointed Undersecretary OF the
Treasury, in charge OF fiscal AFFAIRS,
serving from July /, 1921, to November
1T, 1928.
which will It be-law or banking?
man still on the sunny side OF 40, with
more experience in both law and finance
than probably any other man OF MS
are. It will not come as q surprise II,
upon his return, he Is asked to become
partner of j. P. Morgan & Co, there
to be associated again with his close
personal friend, Russell G: Lenngweu.
81 Also one-tine Undersecretary Of the
Treasury.
a Should municipal and railroad bonds
and installment paper be made eligible
Tor borrowing at the Federal Reserve
banks?
vi The economic policy commission Of
the American Bankers Association,
headed by r. S. Hecht, New Orleans
banker, as chairman, and George T..
srRoberts, economist Of the National City
Bank of New York, as vice chairman,
after a study of the question, concluded
# would be both unwise and unsafe to
~ take such step.
b6S Apparently the committees seasoned
Judgment is to favor for rediscount only
paper that is sensitive to business con-
@ditions involving the production and
distribution of goods, "the proceeds OF
whose sale at each turnover supply the
funds to pay of the original notes"
thus becoming -liquidating.
:; ~, Eligible paper. therefore, insists the
4.EOIuIIiAJLCC, SlAOIuo NC cdSAA EoPSA S~As~S
tends to keep expansion and contrac-
ton Of credit and currency in step with
business.
;. Now any paper that does not aid such
movement is unsound as basis for
credit expansion, thinks the committee,
and in this "unsound for rediscount"
class 1t puts installment paper, railroad
bonds and municipal issues.
~ Hence this conclusion:
81 "Such action Ito allow for rediscount
such new types of securities) might tend
to make reserve credit less liquid, throw
its workings out of step with fundamen-
tai business changes and also increase
the task Of preventing the Federal Re-
serve System from being employed as q
facility to imitation"
III With little borrowing and no demand
for money, there could be no more
- psychological time to announce such
conclusion than right now.
80 Money rates have moved down IN
two other nations so far this week, Italy
Yesterday the Bank of italy reduced
Its discount rate from 6 per cent to
,,51s per cent and today the Reichsbank
,of Germany cuts from per cent to Az
per cent.
- These two rate cuts-the latest-fol-
low the Central Banks of France, Eng
land, and other nations. and are under
stood to be preparing the ground for
The first $500, 000, 900 German repara-
ton loan to be announced shortly.
a. But these cuts are not the only ones
made by the Reichsbank and the Bank
of Italy this year. On March "A, the
Reichsbank cut from 51z to per cent,
and month later, on April "a, the
Bank Of Italy cut from 6 " to per cent.
Money is becoming drug on the
market. Last week money could be Sc
cured in Berlin at 3b per cent, while
9rokers' loans, payable daily. were quoted
at per cent. the lowest figure In Ber-
lin since 1914.
osf Business is finding out that cheap
money alone will not, In itself, revive
business. So far the other necessary
factors are missing.
Today, when the directors Of the
Copper Exporters, Inc, meet in New
g York with Edgar Sengier. head Of the
Katanga, they will have plenty to dis
5cuss. The main question is-can the
dominating copper forces OF the world
maintain and control copper production
and price per pound?
AZ Last night report coming from a
:. very trustworthy source indicated that
the Katanga copper interests Of Africa
4 had withdrawn last Friday from the
Copper Exporters, Inc. Confirmation of
this report could not be secured at the
s0fhceS OF the African Metals Corpora
ton, through which the Katanga carries
on much of its American business.
". The Katanga, in the Belgian Congo,
|, Is the biggest copper producing company
in Africa, with present copper produce
. ton of 100000, 900 pounds annually and
= a potential annual capacity of soc, 000, 900
pounds.
The problem of copper centers around
e.oyerproduction. The world produced
,272 ,000,0 pounds in 1929, of which
nearly one-half, or 2.002 900 900 pounds,
I, came from United States mines. So the
world, outside of the United States, pro-
dnced 2,269, 900 900 pounds.
80 Now copper consumption, outside the
United States, was 300 900 900 pounds
Thus the world. excluding the United
7 States, produced 1853. 600, 900 pounds
more than it consumed.
Without the United States the sur
plus copper situation would have been
worse than it is. For the United States
consumed 100, 600 900 pounds more than
1T produced. So the worlds surplus
stock of copper increased by 269 ,000, 900
pounds during 1929.
But any withdrawal of an important
group like the Katanga from the Copper
Exporters, Inc, would have far-reaching
ssefect on the situation.
fCopyright, 1880, by North American News
h1ot paDer hiiiahce''
sGe
d OIL MERGER RUM0RED.