Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-15
FEDERAL RESERVE
READY TO AID LOAN
Question OF Proportion of
Credit. to Germany Re-
mains TO Be Settled.
ny CONSTANTINE BROWN.

While France and Great Britain are
considering the request Of DR.. Hans
Luther, president of the German Reichs-
bank, that the Bank for International
Settlements facilitate a long term credit
of $500 900 600 to Germany, the Federal
Reserve Bank, in accordance with war;
Gus ofsicial statements. is willing to CO.
operate with leading European bankers
II a satisfactory basis is found for grant,
ing that credit.
When DR.. Luther approached the di-
rectors Of the International Bank at
Basel, Clement Moret, governor OF the
Bank of France, and Montagu Norman,
governor Of the Bank Of England. were
unable to accept At once and reserved
answer.
Mr. Norman Is reported to have found
the sum asked by Germany too large,
and the British government is now in
vestigating how and when the German
government would be able to repay this
new credit Frances delegate has re-
ferred the matter to his government,
which is more interested in the political
guarantees Germany can give than IN
any other thing.
$l50,o0O,0o0 From u. s.
The American Government is not d.
rectly interested, and neither has the
State Department been of1cialy in
formed yet of the German request, but
IL is reported that the Federal Reserve
Bank has been notified that France
and Great Britain expect it to contri-
butte some $150,000, 00G in case the Ger
man demand Is found acceptable. 1t Is
not certain. however, whether the Fed
eral Reserve Bank would be willing to
take such large share as is said to be
allotted to 1t by the European bankers.
In diplomatic circles in Washington,
much importance is attributed to the
conversations taking place today be-
tween Arthur Henderson, British for
eign minister, and the principal men,
bers of the French cabinet. 1t is said
here that these conversations are likely
to decide the political and the financial
fate of Germany.
Today the Importance of the Hoover
plan stands out more than ever before.
1t is explained in official quarters here
that had President Hoover not initiated
the debt and reparations holiday, Eu-
rope would have faced today a most
s. rious crisis.
Because the creditor notions have &C
cepted the principle of the Presidents
plan Germany has to pay today only
a, o0o, 900 marks (Ss.758.oo0 at par) of
which 100000 t$e.56s, 0Oo) will be
immedis tely reloaned to her Had this
plan not been In force, Germany would
have had to pay today no less than
136,00o,0o0 marks. and the entire sum
International Settlements to be distrib-
uted among the creditor nations.
Couldn't Have Paid.
Germany could not have possibly paid
that sum today The events now being
witnessed prove this. The result Of her
failure to meet her obligations would
have undoubtedly caused an interna-
tional complication of the first magni-
Cude
There is no doubt in the mind of the
administration here that as a result CT
the Young plan some of the creditor
nations would have taken 1t upon them
selves to exact from Germany, by force
II necessary, guarantees that Gelmany's
debts would eventually be paid The
fact that the Hoover plan has been
accepted and enforced changes the
situation materially. Instead OF being
confronted with an extremely critical
international political and economic
situation, the world Is confronted today
merely with q difncult financial crisis
III OSrnAny. SuCn cr1SN, IL IS aO-
nitted, Is dangerous and unpleasant
but 1t Is by no means beyond repair.
II Germany is willing to help the other
nations which are so anxious to help her
she can solve the situation within a
few days
1t is hoped here that the concerted
friendly advice all the interested ma
tons are giving now to the German
government will bear fruit shortly. In
responsible quarters in Washington it
IS believed that Chancellor Heinrich
Bruenirg must realize that continually
stubborn attitude will lead not only to
MS downfall, but to a dangerous cha
otto situation in Germany. Under
these circumstances it is believed that
the German chancellor will see his way
70 MAKE the necessary concessions asked
OF him and also to give adequate guar
antees that the money which will even
tually be given Germany will be used
in a more constructive manner than
heretofore.
'Copyright 1897
o