The Guardian And Evening Star, with winch is incorporated the West Coast Times. SATURDAY, OCTOBER 18th., 1924. THE GERMAN LOAN.

Hokitika Guardian, 18 October 1924, Page 2

The Guardian And Evening Star, with winch is incorporated the West Coast Times. SATURDAY, OCTOBER 18th., 1924. THE GERMAN LOAN.

In connection with the |nqosed loan <>,' iMO.ObO.i.’OO to Germany, which is an essential feature of the Dawes plan, it would see in that the British and American bankers did good work at- the recent London Co life re nee ill making perfectly clear t In- conditions under which, in their opinion, .such a loan should lie issued. This is referred to in 11 its current monthly circular of the Bank of I iverpool and Martins, in which it is staleil that the Irani; expression of the bankers’ point ol view rendered an invaluable servin' by creating an atmusplieie of solid eoiiiiuonselise and obliging tip- i onfi-rein-e to recognise that, unless the plain facts of the position were faced, it would not be possible to carry out the rec.uiimcudatior.s of the Dawes report, which are generally regarded as essential to the restoration of real peace and prosperity in Kurope. It is pointed out that intermitiomil loans cannot lie carried through on behalf of borrowers whoso

territory and property art' at tin? mercy <if military aggression liy any Power whit-li decides it lias a grievance. It is a tided that it would ho highly advantageous hath at homo ami ahroad if this point of view wore more frccpiently ex„pressed and more generally respected. At a time when mankind is in a mood to try strange experiments, .and to reward the lessons of past experience as discredited and obsolete, an occasional cold douche of the commonseiise that is supplied by the tests of hanking prudence might lie invaluable in many countries and in many departments of life. It is easy to see that in the opinion of tile great hankers of this country and America, the French occupation of the It till r for another year might imperil the success of the proposed loan. Hence the urgent note which characterised tin l communication from the. Britisli Prime .Minister to the French Premier on this subject. If the hankers consider that the general (auditions justify the dotation of the loan, there would seem to he reason for expecting that it would lie fully subscribed. It is a large amount, and many investors, probably, will not appret into the advantage of holding money to a Inrmer enemy in order to put that enemy on his feet again and iso enable him later on to make some payment as compensation, inadequate though it must he, whatever tin* amount, for the tremendous injury indicted cum the world. Partly .because of this, it would seem that the sue:ess of the Joan operation will depend upon Amorim. That country until recent years lias invested very little in foreign securities, having shown a.strange prejudice against them, hut since the war various foreign loans have been floated in New York, and the fact that some of the great hankers of America are strongly Ciermnu in their sympathies will probably ensure tbe sue;ess of the issue. At least there is no doubt that America just now is following Kuropean political developments very keenly. Yet another reason why America, should freely subscribe is that by doing so sbe would probably rectify to some extent the unsatisfactory economic position in which she finds herself by her accumulation of the hulk of the world’s stock of gold. This gold is serving no useful purpose. As Dr. Walter Leaf said recently, it is large!' sterilised as soon as it is received, and America is apparently apprehensive that the continuance of gold imports will produce a rise in prices and inflation. If, in recent years. America has invested freely abroad—the extent to which she has done so represents an infinitesimal proportion of her resources—she would probably have escaped the economical inconvenience now experienced. Further, she would probably have improved her trade, for it has been the experience of Great Britain over a period of fully one hundred years, that the money lent abroad is largely spent at Home in the purchase of goods, thus greatly benefiting commerce. Probably no other country in the world, paradoxical though it may sound, could afford to receive gold to the extent that America has done since the war.