Evening star., 1931-12-01


held in tiie1neaf future will determine
70 considerable extent the economic
and POLITICAL fate Of Germany
This view was expressed in an inter-
view yesterday by DIR. John T. Madden
dean Of the School of Commerce, Ac-
counts ands Finance. and DR.. Marcus
Nader. professor of finance, at New
York University.
They explained that at present Ger
manys total amount of short-term
debts may be conservatively estimated
At between $4,000 ,00o, 900 and $780,
GOO 900. This is substantially above
the 81 900 600. 900 estimate in the re-
port OF the Wigginf Committee.
Destruction Seen Possible.
In discussing the cleavage of opinion
between France on the one hand and
Great Britain and the United States
on the other, they said; IF the
French are to have their way, Ger
many will be forced. into bankruptcy,
which may lead to oa,olitical upheayals
which Will not enly weaken the status
OF the private creditors. but will also
destroy Germ~ny's capacity to pay
Preparations"
DR.. Madden an6- DR.. Nadler are well
known in the financiai world as direc-
tor ana assistant director, respectively,
: OF the Institute of International Fl
nance. They emphasized, however, that
in discussing the German situation,
they were speaking strictly as individu-
ais, and not as representatives of the
institute
Prominent New York bankers have
been reluctant to issue any formal
statements on the German situation in
advance Of the discussions at Berlin and
Basel, for which Albert H. Wiggin and
Walter w. Stewart sailed on Saturday.
In stnformal interviews, however they
take somewhat optimistic view of the
matter, pointing out that it now Is In q
bargaining stage, which may be ex-
pected eventually to develop into a
more conciliatory- attitude all around.
American short-term private credits to
Germany have been estimated as high
as $500, ,000, 900, but are now understood
TO have been somewhat reduced.
Analysis Of Problem.
An analysis of the situation, as ex-
planned by DR.. Madden and Dr. Nader,
which may be said to be in substantial
agreement with opinions informally ex-
pressed in some important banking cir
cles. follows:
Briefly stated, the German problem
revolves around the question as to
whether Germany will be able to pay
ali its obligations to foreigners and Il
not, how will this debt question be
handled? The obligations of Germany
may be grouped into three classes: %
Preparations, I2) the short-term pri-
yate debts, which under the standstill
agreement mature February 90, 1882
and 80 the long-term debts privately
contracted abroad.
"Reparations-Duriug the year begin
ming with July /, 1882, Germany is to
pay on reparations approximately $400,
5oOo, 900. OF this, $157 900 900 represents
the unconditional annuity.
"Hhort-term debts-The total foreign
ehort-term debt at the end Of July
1881, was estimated in the Wiggin re-
port at about 81 ,900. 200, 900. Since then
considerable amounts have been repaid
but new estimates have greatly in
creased the total amount. At the pres
ent time the total amount of short-term
debt may conservatively be estimated
at between $4,000. ooo.G0o to s2.5oo,-
a00, 900.
"Long-term debts-The long-tern
debt of Germany contracted by the va
fious German borrowers abroad amount
ed at the end of 1880 to approximately
50, SOC. .DOO, ,OOO The annual debt seryic'
on this long-term debt was placed al
$25o, ,O00, ,000
''Of the above obligations reparation:
is political obligation, while the short
term debts and the long-term loan
represent private obligations due chief
ly to the United States, Great Britain
Holland and Switzerland. France
which has extended only very little pri
Vate credits to Germany, Is primaril!
interested in the payment Of repara
tions, and on various occasions tn
French government has stated tina
reparations must be . prior lien owe
the private debts
This brings France into conflic
VII the other nations particularly tn