Big Business at Basle

A banker must have a spade beard; it gives the public confidence. --French Axiom.

M. Pierre Quesnay is the enfant terrible of the sedate Bank of France. He is only 35. He refuses to grow a beard. Among his hirsute colleagues the rise of this "boy" is considered almost a scandal. In Basle, Switzerland, last week the august board of the new Bank for International Settlements (B. I. S.), formed as "The Cash Register of German Reparations" (TIME, March 25, 1929, et seq.), solemnly met and all but unanimously elected Beardless Pierre Quesnay to be general manager of the bank.

The one vote cast against M. Quesnay was Germany's (caster: Dr. Hans Luther, mild successor to brusque Dr. Hjalmar Schacht as President of the Reichsbank). In the first place Germany does not want a Frenchman managing the B. I. S.; in the second place German financiers particularly mistrust a "young man," have often muttered objections against the youth of Seymour Parker Gilbert, 37, protege of Owen D. Young as agent general of reparations.

As a matter of course and by unanimous vote, Gates W. McGarrah, who resigned as chairman of New York's Federal Reserve Bank to go to Basle was elected last week President and Board Chairman of the B. I. S. As his large, well-knit body eased into the chairman's place, Mr. McGarrah cleared his throat and, with a trace of Scotch burr, sonorously announced as the first item of business that his alternate and technical advisor will be Mr. Leon Fraser, the "continuing expert" who was chief U. S. legal advisor to young Agent General Seymour Parker Gilbert. Aside from the routine of getting settled at Basle last week, the B. I. S. did no business--though an optimistic Swiss walked in, laid down a pre-War German banknote for 1,000,000 marks (worthless today) and asked for change, was courteously ushered out.

Big business of the B. I. S. will include the actual printing and sending forth by General Manager Pierre Quesnay of more than $300,000,000 in German reparations bonds within the next few weeks; and in subsequent years, as the markets of the world are able to absorb them--approximately $8,506,000,000.

The general manager who will figuratively shovel out these tons of bonds may be a "boy"' but is ripe in tradition. King Louis XV of France was "carved" (as His Majesty expressed it) by Surgeon Franc,ois Quesnay (ancestor) whom the monarch nicknamed Le Penseur for his philosophical cast of mind. The present M. Quesnay might be called a "career man" of the Bank of France. He functioned as chief French technical advisor last year when Rumania's Leu was being stabilized. At the first and second Hague Conference he prepared the whole documental background of the French position, is acknowledged to possess one of the most brilliant fiscal minds in Europe. Taking after his surgeon ancestor, he makes a hobby of studying philosophy at the Sorbonne.

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