The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, OCT. 1st, 1024. THE GERMAN LOAN.

Hokitika Guardian, 1 October 1924, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, OCT. Ist, 1024. THE GERMAN LOAN.

■An essentia, lpart of the Dawes report to adjust reparation matters, is a large loan to Germany. The representatives c.f Germany are now proceeding to iLcndon to discuss terms. Here, again, do we see something of the might and majesty of British finance. It would appear that the success or failure of the reparations settlement turns on the attitude of Groat Britain. The late American mail brought papers giving the views of United States 'hankers on this very subject. It is plain that the United States is going to move warily

in the matter. We would assume Britain will he no less i iivumspocl. mid not likely to take definite action till the raising of the complete loan is assure:!. and that n.ssiirante to come from all the Allied parties and America interested in tin l settlement. An American (inniicial j( urnal reviewing the position gi.es on to remark that a fundamental feature of the Dawes plan is a new monetary system T.r Germany, to he provided l.v a central hank, mid the res,nines of this hank : r. to he | rovided by a foreign loan. One of the first guest ions that has ar.scii, inevitably, has keen about the security for tins loan. Proiuiucni Aiueriiau '..ankers wlm happened to I e in London were asked for their o, iilion c.f what would lie required to make the loan a: eeptalile in the I’nitcd Stales and gave it. This re.spmne on tlieir put ceeiiis t> have 1 ice ll interpreted in some French quarters, says (he pa; or. as an attempt- to dictate the terms of the set l lenient in n manner unfriendly to I*’ranee. Seine of the comments of F.cuch news; ap i s read ; cry mu !i like loinmeiits fie.'pi.oitly made jo this country main the “dictation" mil “cxal lions" of I ankers, mid allowance ran lie made ae: imlingly. The public on belli sides of the mean i.s very much alike in in t understanding that when hankers iirg<ilial“ loans they a’e governed by the c nditic.as of the money market, and the iicc-sity of enlisting the i-oopei at ion of the investing public. This is patticnlarlv true of a loan of the size of the foreign lean | ropiscil fer Germany. Bankers do rut ncgotialc f.iich loans for themselves, l,ut fur ilistlihlltiini to Ihni'saoils' of invcslors. and when consi'!tc:l as to the feasibility i f phe ing sic h a loan tlicv liccess'lrilv give tlieir views as to the terms and coiidit inns rio 111 i»I to make the d ilation a .sue: ess. Moreover, il they ere to act as agents in placing the lean with I'm Amcri.au jJuhlic. they must consider the terms mid coinlitions up.ii u hic!i they will he willing to recc.mmciid it as a sound investment to buyers accii.stomed In look In them fur advice. Certainly it would have l.ecn quite inn .:ssjlile to nin :iiter a loan to Germany at any time sime the war down (n this time, mid if default upon any i f the ] lymeiits of the Daves plan will have the effect of throwing the sitltalToil hack into the state cf chaos that has existed it is safe to say that A.meiican investors will not want the German bonds. They are not parties to the situation, naively fays the writer, and do not have to get into it : they are not eager to get into it. and evidently they nil! have to he made secure against, the conditions likely to follow a default under the Plan. if tlieir participation is desired. Fiiilouhtedlv the same is true as to all other investors, including those who are citizens of Frame and other allied countries. How to provide unquestionable security fur the German loan dearly is one of the most important ] roblems of the conference.