Oversubscribed

At modernistic Hotel George V in Paris, last week, representatives of nine nations and many international banking houses argued for 14 hours, telegraphed, telephoned across the sea. Due to unsettled markets the offering price of the German Government International 5 1/2% Loan 1930 bonds was reduced from a pre-arranged 92 to an attractive 90. This was opposed by representatives of national treasuries; opposed also was the motion offered by Montagu Collet Norman, director of the Bank of England, that the U. S. banking group's commission be fixed at a higher rate than that given to others, by reason of the U. S. marketing system. Not until 12:30 a. m. (Wednesday morning) were these motions approved, the six necessary documents signed, the meeting adjourned by Chairman Gates W. McGarrah, president of the B. I. S.

Next morning in New York the office of J. P. Morgan & Co. opened its books for subscription, closed them at noon "over-subscribed." Forty-five banks and banking houses, whose resources of credit might be considered unlimited, followed the Morgan name on the issue's advertisement. Trading on a when-issued basis on the New York Stock Exchange, the bonds reached 91 1/4, closed 90 7/8 were the most popular of the day, with a turnover of $1,050,000. Due to the lower price of the offering here, many French investors bought in the New York open market. Exempt from the foreign bond tax in France, the loan was floated there at 98, the difference of 8% paid to the French treasury by the B. I. S. in lieu of investors' taxes.

While the majority of U. S. bankers and economists hailed the loan as a constructive step toward Liquidation of the War, opinion was not unanimous. Among the loan's detractors were:

Representative Louis F. McFadden, chairman of the House Committee on Banking & Currency, who fears all that he does not understand. "Endeavoring to keep the United States and its Federal Reserve system out of involvement in the reparation payments," he last week introduced a joint resolution into Congress: that the purchase of German Reparations bonds be prohibited to national banks, Federal Reserve Banks, and members of the Federal Reserve Bank system.

H. Parker Willis, editor of the Journal of Commerce, who pointed out that the $200,000,000 applicable to Reparations is less than 50% of the average $500,000,000 a year payable by Germany on Reparations. "To say that this issue marks the beginning of the end of the Reparations problem is utter nonsense."

Dr. Carl Bergmann, German economist: "It is not the result of economic experience. ... It is a political venture. . . . It is only one step further."

Andre Geraud, known in the Echo de Paris as Pertinax: "The American bankers were extremely exacting about the terms of the issuance."

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