"Dying With Despatch"?

"Dying With Despatch"?

John Pierpont Morgan returned to Paris and the Second Dawes committee last week, having shaken off a cold by cruising the Adriatic in his black yacht Corsair with the Archbishop of Canterbury (TIME, April 29).

There seemed little enough for the greatest financier to go back to. "If our committee is not already dead," croaked a Japanese delegate, "it is certainly dying with despatch." Most observers concurred, but not indomitable Owen D. Young, chairman of the committee and co-representative of the U. S. with Mr. Morgan, who conferred as often as thrice a day with the "Iron Man" whom most people blame for disrupting the committee, Germany's hard, ungracious Dr. Hjalmar Schacht.

Also in on several of these secret tete-a-tetes was poker-faced Emile Moreau, governor of the Bank of France. Surprising credence was achieved by a wild rumor that Mr. Young contemplated the resignation of his friend and protege, Seymour Parker Gilbert, as Agent-General of Reparations and had in mind as his successor M. Moreau. On the assumption that Germany really cannot pay as much as France is sure she can, it might be well for the French government's chief financial adviser to find that out for himself in Berlin. Persistent rumors apart, there was no reason for supposing that Mr. Young leaned toward any such assumption.

White-hot rage against the "Iron Man" flamed up in the French press last week, when Dr. Schacht as president of the German Reichsbank raised its discount rate from 6 1/2% to 7 1/2%. The inference drawn excitedly in Paris was that the Reichsbank w?s trying to give the impression that German finances are already overstrained and cannot bear even the present reparations burden.

Facts are that last January the Reichsbank lowered its rate from 7% to 63%, "for the purpose of stimulating German trade." That desideratum was not attained. Instead the attraction of abnormally high money rates in Manhattan and other foreign capitals operated to deplete seriously the Reichsbank's gold reserve. The only possible counter-move was to raise the rate last week, and in Manhattan it had been anticipated for some weeks that Dr. Schacht would, nay must, take this step.* In Paris, however, angry editors rose above common sense, charged that the lowering of the rate last January was a "plot," even charged that the "Iron Man" would rather see the mark crash down to infinitesimal value a second time--thus bankrupting the Fatherland--than agree to pay the Allies what Germany owes.

In an atmosphere thus surcharged with animosity, progress was difficult. Messrs. Morgan and Young were making herculean efforts to save the conference. It was understood that truculent Dr. Schacht had been told that the German Nationalist Party must give up all hope of dodging reparations payments without fatally upsetting Germany's credit standing; that Germany's refusal to come up to the Creditor Powers' terms was drawing her diplomatically further away from England and the United States, drawing England and France even closer together. Thus chastised, Dr. Schacht entrained for a five-day visit to Berlin. Officials of the U. S. State Department presumably in closest touch with Mr. Young, preserved an optimism several degrees warmer than that of any correspondent in Paris.

*The stabilized German mark is among the strongest currencies in the world. Last January the entire issue in circulation was covered to the phenomenal extent of 70% by the Reichsbank's gold reserve. The legal requirement is 40%. Last week the reserve had dwindled to 50%, when Dr. Schacht raised the rate.