New Harness

GERMANY New Harness

More than any other worker the Teuton is cooperative. As early as the mid-13th century the towns of Hamburg and Luebeck inaugurated enlightened co-operation which led to the famed Hanseatic League; and late in the 19th century, Germany gave to the world that ultimately co-operative enterprise, the proletarian loan bank. The gigantic post-War industrial Frankenstein erected by Herr Stinnes is conceivable among no other people. Only because the German settles down in any workable industrial harness and tugs mightfully is the Dawes Plan practicable. Today there hangs eminent over Germany a new super-Dawes work harness. Already there is a whispered possibility that Germany may not be able to meet in full the stupendous two billion gold mark Dawes payment to the U. S. due in 1927-28. What then? Assumedly the dismaying possibility of partial default may be staved off by U. S. loans to Germany with which German reparations can be paid --at the cost of envassaling German industry to U. S. or at least non-German bankers. The machinery or "producer-goods" security for such loans would then become literally a foreign mortgaged harness for the German worker. Who may be called upon to fit this harness? Only last week a trifle of preliminary fitting was done by the potent Manhattan firm of Dillon, Read & Co. The cables carried news that the great Diskonto Gesellschaft, the largest bank in Germany, has been forced to increase its capital by 35 million gold marks, of which 10 million were acquired by Dillon, Read. Though this transaction was entirely extra-Dawes Plan, it unquestionably had its roots in the pinch of reparations upon German industry. As everyone knows, the Diskonto Gesellschaft is one of the four great "D. Banks" of Germany, which include the Deutsche, Dresdener and Darmstaedtner Banks. Before and during the War this potent fiscal quadrangle stood four-square in dominance of German industry. For one of the "D. Banks" to be thus forced to lean on foreign capital would have been deemed incredible in 1914.

Still more incredible to Germans is the fact that Mr. S. Parker Gilbert, a young New Jersey Baptist who took his B. A. at Rutgers only two years before the World War began, now sits fiscally enthroned over Germany as Agent General of Reparations. Beside 34-year-old Seymour Parker Gilbert such financiers as John Pierpont Morgan, 59, of 23 Wall Street, loom as fiscal gaffers. Yet there are among active U. S. fiscal titans men of a youthful middle age. For example, Clarence Dillon, of Dillon, Read & Co., is 44. Mr. Dillon is of course the enfant terrible of Wall Street, "a comer," who has "come," a dollar-genius brilliant enough to negotiate the sale of Dodge motors last year for $146,000,000 cash, yet sufficient ly orthodox to declare: "There is no advice you can give a man except this: 'Do your job better than that job has ever been done before.' " The absorption of a mere ten million gold marks of Diskonto Gesellschaft paper, last week, was in sober truth mere routine for Dillon, Read, who have placed $85,000,000 of securities for the Government of Brazil, $81,000,000 for the Canadian National Railways, $35,000,000 for the Republic of Poland, and $15,000,000 for the Great Consolidated Electric Power Co. of Japan. Not the capacity of U. S. finance to float and absorb loans but the ultimate capacity of Germany to work off interest and principal, must needs absorb Messrs. Morgan, Dillon, Gilbert and many another for years to come.