REPARATIONS EXPERTS

Sun (Auckland), Volume II, Issue 609, 11 March 1929, Page 9

REPARATIONS EXPERTS

COMMUNIQUE ISSUED INTERNATIONAL BANK PLAN (United P A.—By Telegraph — Copyright) (Australian and N.Z. Press Association) (United Service) PARIS, Saturday. The Committee of Experts on Reparation has issued its first communique since the opening meeting. It is a long and important statement about a plan at present being discussed for a new international bank.

However, the scheme is tentative, and is liable to be rejected, either partly or wholly. The statement explains that the experts believe a final settlement of reparation payments will necessitate permanent peace-time machinery to replace war-time political machinery.

The proposed bank would primarily to a trustee for receiving and disbursing the German annuities. By so doing it would facilitate transfers. Also it would finance deliveries in kind and become an intermediary between the interested Governments and the issuing banks for the marketing of the bonds which might be issued for the commercialisation of the German annuities.

The bank would co-operate with the existing banks and would receive, if required, both clearing investments and deposits. EXCHANGE RESERVOIR

With its normal large holdings of foreign exchanges the bank would be enabled to become a useful exchange reservoir for the existing central banks with which it would co-oper-ate. But the proposed bank would strictly avoid competing in commercial investment with the other banks. It would, indeed, subordinate its activities in any particular country to the policy of the central bank of that country. Although the proposed bank would not be a super bank, its operations would tend to strengthen the cooperation which has already been developed between the central banks and which has done such marked service in restoring the gold standard throughout the world and otherwise stabilising financial conditions. The management of the new bank would have to be non-political, with an experienced international directorate, aided by an advisory committee. It would have offices situated in one of the smaller countries, where a suitable legal status could be maintained. WOULD HELP BOTH SIDES The proposed hank would probably be equally advantageous to the debtor and the creditor nations and enable Germany to stand oil her own feet financially, with the responsibility of maintaining her own credit. The bank also would assist the Reichsbank and other central banks to maintain the stability of exchanges. That would steady business conditions and also would facilitate the uninterrupted flow of the annuities and the commercialisation of the German debt. The creditor nations would participate in the profits which the bank might reasonably expect to earn in filling the existent gaps in the world’s banking organisations, particularly those resulting from th“ situation created by the reparation debt settlements.

Tt is expected that the committee will have a discussion next week to clarify the project and enable it to decide whether to proceed with the plan or to postpone it for further consideration.