"A Nice House"

The great financiers assembled in Paris as the Second Dawes Committee spent last week in elaborating privately their plan of creating a stupendous Bank of International Settlement (TIME, March 11) to deal simultaneously and on a business basis with every phase of the German

Reparations problem. As the work progressed no public utterance was made by any member of the U.S., French, German or Japanese delegations, but the British and Italian chief delegates expressed themselves briefly. Sir Josiah Stamp: "There are three sides to our problem--political, financial and economic. And as soon as we--or any one else--have finished with one aspect, another bobs up. "It is impossible for any one to take account of all three at the same time and it is not in the province of the experts [of the Second Dawes Committee] to do so. They are trying simply to find a solution for the political aspect and part of the financial one. "They are all aware every moment that the economic aspect may any day within the next 60 years upset all their calculations."*

Signor Alberto Pirelli: "We are building a nice house, but we are not yet sure what its dimensions are to be and we don't know what furniture we are going to put into it." Against the fiscal defeatism of Sir Josiah Stamp, the studied pessimism of the Germans, and Signor Pirelli's attitude of uncertainty, the U.S. Delegates were understood to be strongly militating for a solution, with the well-nigh irresistible impetus of their moral and financial prestige.

Finally last week the delegates achieved sufficient unity to issue a joint mimeographed statement--the first released since the Second Dawes Committee assembled. Though couched in the most general terms, it was well calculated to quiet fears that the new Bank of International Settlement will prove a dangerous competitor of other banks and bond houses. "... The institution to be created," read the statement, "would strictly avoid competition with existing commercial and investment banking institutions and would consider it to be of prime necessity to act in close co-operation with existing central banks of issue. In fact, the bank would coordinate and subordinate its activities in any particular country with and to the policies of the existing central bank of that country. "The new bank would be in no sense a 'super bank' to exercise a dominating influence over existing institutions. . . . "It would supplement rather than duplicate existing institutions and would assist rather than direct. "As to the management, the bank, if organized, must be non-political and must be international--free from any dominating financial relationships. Upon the directorate should sit only men of experience and international repute. ..."

*Apropos seemed an editorial of last week in the Deutsche Bergwerks Zeitung of Duesseldorf, a paper generally considered the mouthpiece of one of the German delegates at Paris, Dr. Albert Voegler, Member of the Board of the Ruhr Steel Cartel.

"Among the European delegations it is realized clearly," said the Voegler-controlled Zeitung "that the Second Dawes Committee will not bring a definite settlement of the Reparations problem, but that a relatively favorable partial solution can be counted upon which will take account of the interests of all concerned. A definite solution of the whole complex problem will be possible only when the United States will consider a re-examination of its War debt demands."