Readjusting Reparations

When the cream and chocolate Golden Arrow Express glided out of Paris, one noontime last week, a certain smooth-shaven, starched-collared, quietly dressed U. S. passenger passed unnoticed among many another en route to London. As he worked rapidly through a neat sheaf of papers, the traveler looked much like other graduates of Rutgers, other Baptists, other natives of Bloomfield, N. J. His choice of viands at luncheon was to eschew a la carte dishes and accept the table d'hote offered. Fellow passengers continued unconscious that they were actually traveling on the same train with the Agent General of Reparations, Seymour Parker Gilbert, famed fiscal tidier-up of Europe.

Respectful Englishmen welcomed the Agent General at Dover and arranged his discreet conveyance to a small estate in Kentshire. The host, who personally flung wide a welcoming door, is the fiscal arbiter of Britain, rubicund Winston Spencer Churchill, affable but shrewd Chancellor of the Exchequer. Very soon it appeared that Host Churchill was not excessively anxious to discuss and come to an agreement upon the grave matter which had caused Guest Gilbert to come over via Paris from Berlin. The Agent General's visit meant that Germany purposes to hold France and Britain to the promise recently given by their representatives at Geneva: namely that an International Finance Commission shall be set up with all appropriate speed, to readjust the whole structure of Reparations Payments (TIME. Sept. 24). However, Chancellor Churchill has long been known to favor at least temporary retention of the Reparations status quo. Therefore it was not surprising that Host Churchill kept Guest Gilbert out in the open a great deal--displaying to him the Churchill estate, rather than settling down before the hearth to wrestle with millions, billions.

Prominent among rustic oddities displayed was a small, red brick cottage just completed by the Chancellor, who has personally laid each brick. All through the summer he has troweled vigorously, whenever he could snatch the time, assisted by his hodcarrying daughters, Sarah, Diana. By thus bricklaying, smart "Winnie" Churchill has achieved two objectives. His embonpoint is somewhat reduced; and. what with elections coming on, he has reaped much vote-getting publicity among the myriads of laboring Britons who have seen him troweling and slathering mortar in the "picture papers." Since the whimsical Chancellor has actually carried his stunt to the extreme of joining a bricklayers' union, he was able to display to Agent Gilbert a union card:

Winston S. Churchill

(Occupation, Bricklayer)

Westerham Kent

As if all this were not sufficiently distracting from Reparations, the Agent General was beamingly conducted through the Chancellor's Piggery (TIME. Oct. 22). where fat, nuzzling porkers are stuffed with choicest swill for prize winning purposes. From a source close to Mr. Gilbert it was reported that the grave problems in hand were not seriously attacked until he and Chancellor Churchill went up to London for a formal conference with Prime Minister Stanley Baldwin.

Unquestionably discussed by the three statesmen was the well known general thesis of Reparations Revision which was first broached between the German and French Foreign Ministers, Stresemann and Briand, during their once famed but now forgotten luncheon conference at Thoiry (TIME, Sept. 27, 1926). As generally envisioned, today, the project involves scaling down the future Dawes Plan payments to be made by Germany, in return for a present lump payment from Germany to the Allies. The only way that Germany can raise such a sum is to sell in the general investment market securities amounting to a mortgage on the German State Railways and kindred properties. It is still persistently hoped by many Europeans that the U. S. will make the new negotiations an occasion for further scaling down the Allied debt to the U. S.

Naturally the compromise just sketched in principle involves at every turn thorny factual problems which will have to be threshed out. For one thing the U. S. State Department may impair the whole arrangement by sternly advising U. S. financiers not to absorb the German bonds. For another thing Great Britain is known to be tolerably well pleased by the Reparations status quo; and Chancellor Churchill in particular has displayed reluctance to readjust his precariously balanced budget on the basis of a new arrangement with Germany.

Following the Gilbert-Baldwin-Churchill conference in London, the Agent General returned to Paris, so unobtrusively that even the press did not at first chronicle his coming. After a lengthy conference with French Prime Minister & Finance Minister Raymond Poincare, Mr. Gilbert wired London, with the result that Chancellor Churchill set out for France--encountering very dirty weather on the Channel--and arrived upon the doorstep of the British Embassy in Paris at 6 a. m.

Followed a Gilbert-Poincare-Churchill parley. Directly afterward Messrs. Gilbert and Churchill proceeded to the British Embassy for lunch--and their luncheon companion was John Pierpont Morgan.* Not until the cables flashed MORGAN did men of caution and property recognize that the story had really broken. Only then were they sure that final Reparations settlement will now be made, after ten years of piddling with approximations. After luncheon a purring motor car conveyed Chancellor Churchill to the station, where he impetuously entrained for London. Another car carried the Agent General to confer lengthily with Emile Moreau. Governor of the Bank of France. Rumors from Berlin told that Dr. Hjalmar Schacht, stern, forthright President of the Reichsbank was expected momentarily to leave for Paris.

Out of all this rushing to and fro by the fiscal heads of. Europe arose a popular impression that sweeping action would be taken at once. At the very least it seemed that the lukewarmness of Chancellor Churchill had been transformed into eager cooperation. Perhaps the Great Powers were on the eve of formally consummating the project first dreamed at Thoiry.

Secretive as usual, the Agent General would say nothing. No official communiques were issued. But leading correspondents convinced themselves with significant unanimity that the developments of last week were preparatory, preliminary. The world's foremost fiscal tycoons were understood to have debated principally questions of the organization and procedure to be followed by the new International Financial Commission, which will reopen the Reparations Question. A leading point at issue between the tycoons was ascertained to be whether the experts attached to the Commission shall be private financiers or governmental treasury experts. Agent Gilbert was understood to have urged the former, and Prime Minister Poincare the latter. No decision was taken.

Reports of the conference with Mr. Morgan were to the effect that the world market could not absorb sufficient German bonds to make the lump payment project feasible. In this case the statesmen can do no better than to definitely fix the amount of the annual payments, and the numbers of years during which Germany shall continue to pay them.

* It is freely predicted that the next man to be dubbed Morgan Partner will be none other than young Agent General Gilbert.