The International Bank
September 4, 1929 THE COMMONWEAL 437 remarkable only for its marvels of machinery, we are well content to have escaped it. The future develop- ments for which we most earnestly long are of...
...THE INTERNATIONAL BANK O ASPECT of the plan drawn up under the auspices of Mr...
...A more serious objection grows out of the fact that the whole Young plan, like precedent arrangements, is based upon the assumption of Germany's full guilt...
...There can be no doubt that such a personnel will be able to cope with affairs in a competent manner...
...That agency is the proposed "international bank...
...The plan also specifies a number of other restrictions designed to maintain freedom from competition...
...According to the language of the Experts' Committee, this bank will affect German reparations by performing "as trustee for the creditor countries, the entire work of external administration of the plan, [and] shall act as the agency for the receipt and distribution of funds, and shall supervise and assist in the commercialization and mobilization of certain portions of the annuities...
...Whether the men of this time possess electrical conveniences beyond our powers of comprehension will be a trifling circumstance...
...Jeremiah Smith, jr...
...Under the Dawes plan, one of the important methods was the sequestration of funds by the agent-general until the normal ebb and flow of capital had been restored...
...It confronts it with the same policy which has governed American relations with other agencies of international co6peration developed since the war--a policy which favors private participation in such endeavors but takes cognizance of the public desire for isolation from Europe...
...Meanwhile we may well be grateful for the progress toward sanity that has obviously been made...
...These and other queries have been widely commented upon, and it seems desirable that as many citizens as possible should gain some clear view of the matter...
...As was said in a paper contributed to The Commonweal some months ago by Mr...
...Thus the bank is to become a kind of "international advisory council," similar in a few respects to the Council of the League of Nations itself, the immediate business of which will be the handling of German reparations...
...the bank paves the way for a definitive settlement of the whole problem, eliminating as it does all personal and political factors of the kind attached to the Reparations Commission...
...Young is either more interesting or more nebulous than the "international bank...
...The future developments for which we most earnestly long are of another order...
...the way is now open for the appointment of a management qualified to deal with the situation in the most efficient manner possible ; and the need sensed long since for co6peration between the separate banking institutions of the world may be met, at least in a measure...
...This is already being repudiated by historians, and one may doubt if any large number of citizens in the former Allied countries really cling to it...
...The case for the bank rests, therefore, upon several points...
...It is true that Mr...
...Monroe expressed the hope that the office of agent-general would "not be abolished unless some agency is set up to take over this important function...
...The victory insisted upon it, however...
...The government of the United States will, it is true, enter into no official association with the proposed bank...
...We may remark incidentally that one of the best discussions we have seen is that contributed to the August Quarterly Journal of Economics by Mr...
...It is pointed out in reply that the amount of capital stock is relatively small, and that its available funds would ordinarily never equal those manipulated by any one of the large New York banks...
...Germany cannot herself manage the reparations enterprise, owing to the difficulties involved in distributing payments so that the money market as a whole will not be unduly affected...
...He is relatively well satisfied (and we believe correctly) that the "international bank" embodies a remarkable and practical idea...
...In general it is also to be concerned with providing "additional facilities for the international movement of funds...
...If one may summarize all the available information, it would seem that this part of the Young plan is distinctly worthy of approval...
...September 4, 1929 THE COMMONWEAL 437 remarkable only for its marvels of machinery, we are well content to have escaped it...
...Smith does not resemble the prophet whom his surname recalls...
...The new age about which we like to think is one informed by tolerance and friendship, in which humanity will not be denied the criminal, the errant and the weak, in which it will be actively recognized that men are created equal, that they are endowed with inalienable rights to life, liberty and the pursuit of happiness, and in which the notion that progress lies in interfering with these rights will have become more extinct than any Dodo...
...The sponsors of the idea refrained from drawing up a detailed constitution...
...and while the machinery proposed might tend to establish the European status quo more firmly, eventual modification must be expected not from conferences of diplomats but from the natural order of political and economic developments...
...Why are the several nations so eager to see it established in that place which each considers most advantageous ? In what ways will it solve the haughty puzzles which confront the financial world...
...A. E. Monroe, the difficulty underlying Germany's activity as a debtor nation is to effect "transfer of reparation moneys" so that the flow of funds into a high-interest-paying market will not be impeded...
...They merely agreed that the governors of central banks in the several countries interested would constitute the best board of directors, and that the stock for the institution should be subscribed by those banks...
...And they will so regard it...
...The most important question is this: will the institution wax so large that it will endanger other banking institutions and eventually "corner" a significant portion of the world's funds...
...In practice, of course, this weapon was not frequently resorted to, because of the needs of a German industry in process of reconstruction...
Vol. 10 • September 1929 • No. 18
