Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-06-01
World Bank Is Called
Imperfect but Useful
By GERvILLE REACHE,
Noted French Journalist.

PARIS, May Sl.-This week saw q
painful spectacle in the meetings Of
the bankers preparing the issue Of tina
Young reparations loan. They did not
appear to be very conversant with
their business. AS Q result there was
. storm Of criticism, which was scarcely
justified.
The bank was no sooner founded
than enormous responsibilities fell on
its shoulders, while S. Parker Gilbert,
free ut last, skipped on to gather
laurels for his faithful and equitable
application Of the Dawes plan.
Charged with mobilizing a fraction
OF the Young plan annuity and pre-
pairing q $300,000,000 international
loan, the Bank for International Settle
mentS had prepared q draft of the
loan contract. This turned out to be
contradiction of the plan itself. The
result was protracted discussion, q
part OF which turned on pin points
with the respective treasures. -
At the first contact with realities the
absurdity was realized Of having con-
nned this establishment TO Basel which
Is distant from every real financial
center, and finally it was in Paris that
the overlong negotiations took place.
Montagu Norman, governor of the
Bank Of England, witnessed these
formalities with a broad, ironical smile.
Was he 1nwardly rejoicing over the difi-
cultieS in which Gates MacGarrah, the
American head of the bank, was
plunged? Doubtless he was not, but on
this occasion he probably wished to
stress once more the British reservations
regarding the new institution.
The causes Of the British grievances
are easily understood. After enormous
sacrifices the British succeeded in main
tanning startling az IN L.
still the leading international currency.
Therefore 1t was considered due the
British that the Bank for International
settlements should be established in
London, where it would have the best
opportunities to fructify its capital and
deposits and also give the British n
more important place In the manage
ment OF the establishment.
individually the resistance and sta
nlllty OF sterling amid the postwar
European monetary catastrophes was
useful to everybody and England should
be Justtflably proud of the example of
financial integrity she has given to the
world. But In matters such as repara.
lions and tnterallied debts 1t was necea-
sary to take account of the other prin-
clpal interested parties. Why, once 1t
was decided that the bank would noE
nave its headquarters In London, did
VIC oElIlSn SO strangely cold-Shoulder
and despise the new establishment?
Britain could have played a more
important part in the organization of
the bank. but 1t was the British them
selves that declined. At The Hague
when the issue of the German loan was
considered, the amount was fixed ia
dollars, the bonds could have been
printed In six currencies, Including
sterling, but again the British refused
1t is not easy to understand this
attitude.
Nevertheless the loan has every
chance Of success. The operation is
destined to bring into international re-
lationS between creditors and debtors
new era which will be profitable to
all the great powers.
The attitude Of the British govern
ment toward the bank will have con-
siderable Importance In the future. It
devolves primarily on the prudence and
wisdom Of the directors Of the Bank of
England and the Bank Of France to
establish harmonious relations first
between themselves and then between
all the central banks Even considered
as 1t Is, with all its defects and all its
qualities, the Bank for International
settlements can play a useful part in
this field. Like all human works, 1t is
only an imperfect tool, but it is better
to use 1t as 1t Is than to seek tcMnip
in the bud this endeavor toward inter-
national financial collaboration