(See front cover)
For hours at a time a lot of important international bankers locked themselves in a room in Basle last week. Eventually they would emerge, saying nothing, and repeat the process on the following day. They were:
Dr. Karl Melchior, of the Warburg banking firm (Germany).
Alfredo Beneduce. President of the Consortium on Public Works Credit (Italy).
Emile Francqui, Vice-Governor of Societe Generate de Belgique.
Dr. R. G. Brindschedlar of the Credit Suisse (Switzerland).
T. Tanaka, London representative of the Bank of Japan.
0. Rydbeck of the Svenska Bank-foreningen (Sweden).
C. E. ter Meulen, Financial Committee of the League of Nations (Holland).
Sir Walter Thomas Layton, editor of The Economist (Great Britain).
Emile Moreau, former Governor of the Bank of France.
And the President of the Committee,
Albert Henry Wiggin, Chairman of the Governing Board of Chase National Bank (U. S. A.).
Quickly reporters began calling this assemblage the Wiggin Committee. What the Wiggin Committee was supposed to be doing was investigating, under the auspices of the Bank for International Settlement, 1) Germany's credit needs and 2) the likelihood of changing Germany's present short-term credits into long-term ones. On the first point, the Committee approached agreement that what Germany needed was renewal for six months of 5,000,000,000 marks ($1,187,500,000) which she already owed her creditor nations. It was soon seen that there was little likelihood of the committee doing much about the second point.
The Wiggin Committee seemed satisfied with trying to arrange what German editors called a "Stillstand Consortium," a formal agreement to leave all present foreign credits untouched in Germany for six months. France as usual objected. She thought three months was long enough, said French law does not permit a six months extension, but since France owns only about 5% of the foreign credits in Germany her objections this time did not carry the weight that they usually do. France finally agreed to a special formula for a three months renewable prolongation.
Stillstand Moves. First step was to listen to a long elaborate explanation of Germany's present financial position from Dr. Karl Melchior. This led to a few hard words, for Dr. Melchior either did not know or would not say just what assets Germany holds abroad. Moreover, the political situation in Germany was so improved (TIME, Aug. 17) that everyone felt more free to handle the Germans firmly. There was much criticism of German domestic extravagance. From the Wall Street point of view no financial diplomat could better express the hard truth which Germany had yet to be told than Banker Wiggin. As head of the Committee he could say these things privately or call as he did upon other speakers. Sir Walter Layton was loud in demanding German fiscal reform; he pointed proudly to the drastic economies that Britain is considering (see p. 16).
Next move was to invite representatives of twelve creditor nations to appear before the committee. Most important of these gentlemen was, of course, the U. S. representative, the Committee's president, Mr. Wiggin, who was empowered to act not only for Chase National, but for all New York banks.