The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-07-21
u. S. PRESENTS
new PLAN TO
AID GERMANY
Urges World Powers Banks
to Join and Maintain
Short Term Credit.
PROPOSAL MEETS FAVOR
Great Britain and France
Reported Interested
in Suggestions.
BY JOSEPH Fl. BAIRD
United Press STAFF Correspondent

American government through its
representatives at the London con-
ference today proposed an inter
national agreement of bankers be
made to maintain short term
credits amounting to $4,000 900
which have been extended to Ger
many. The proposal was made as
means Of safeguarding the German
economic structure.
The plan provides that European
nations eliminate present political
friction for the economic benefit of
Europe. It suggests that an inter
national committee, probably under
the auspices of the Bank of Inter-
national Settlement, provide
machinery for international CO.
operation to maintain short term
credits for Germany.
The American plan does not en-
visage any immediate long-term
credit to the reich. It does pro-
vide that immediate consideration
be given to the ultimate conversion
of some short-term credits into
long-term obligations.
Outlined at Conference
The American plan was made
public here today by William Cas-
tie, acting secretary of state. 1t
was outlined to the seven-power
economic conference in London by
State Secretary Henry l.. Stimson.
President Hoover communicated
the plan to Stimson and Secretary
Andrew Mellon last Friday. and
the two cabinet officers discussed
the plan in broad outline with the
French and Germans in Paris on
Saturday before going to London.
The proposal follows:
1. International bankers agree
nent to renew 81, 200, 100000 of short
term credits to Germany.
2. An inquiry into immediate
further credit needs of Germany.
g. Development in the next six
or eight months of plans for con-
version of some of the foregoing
short term credits into long term
credits.
Seek to Aid Confidence
1.-THE essence of the problem is
the restoration of confidence in
Germany's economic life, both in
Germany and abroad" the United
States statement here said.
"On the political side the United
States hopes that, through mutual
good will and understanding. the
European nations may eliminate all
friction so that the world may rely
upon the political stability Of
Europe
"On the economic side, the pres
ent emergency is strictly short
term credit crisis. Fundamental
pressure upon German economy dur
ing the period of depression has
been relieved by the joint action
of the creditor powers in suspend
ing all payments upon government
tai debts during the period of one
year.
But Germany has financed her
economic activities to a very great
extent through the medium of
short-term foreign credits.
Soundness Is Stressed
There is no reason to doubt the
soundnesS of the basis upon which
these credits rest, but the general
uncertainty which has prevailed for
the last few weeks resulted in such
a loss of confidence that the Ger
man banking and credit structure
was subjected to a very severe
strain.
Fundamentally there is nothing
to justify the uncertainty. and If
through cooperative action, it can
be arrested, there is no reason why
the present emergency can not be
immediately and definitely sur
mounted.
In the development of such pro-
gram, the governments of the
countries having principal banking
centers. including the United States,
Belgian. France. Great Britain,
Holland, Italy. Japan and Switz-
erland and other important bank
ing centers, might we'll undertake
to encourage their bankers so to
organize as to permit the main
flamenco for an adequate period of
time of present day outstanding
lines of credit to Germany.
Strict Control Urged
1.-THE responsibility for working
Put the details of such a program
Ind the methods of making 1t eff
lective with due regard to the pro-
lection of the banks and the need
Of German economy should be left
10 the banking communities of the
respective countries and the CEN
trail banks could we believe be relied
puon to furnish the necessary
leadership, cooperation and direc-
ton.
Such voluntary arrangements
should be supplemented, for the
time being, by strict control of all
foreign exchange transactions by
the reichsbank so that the integ-
fity of the program can be main
tanned and the banks that are par
ticipating can be assured that there
would be no arbitrary withdrawal
either from within or without Ger
many"
Castle said he understood Great
Britain was favorable toward the
proposal. He added the interest
France had taken in providing a
long-term loan was ample Of evil
dence of its desire to cooperate in
solving Germanys problems.