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Since his original decision of 1913 Mr. Morgan has refused the chair of innumerable mighty corporations; but the death of Judge Elbert H. Gary (TIME, Aug. 22, 1927) induced him to become Chairman of U. S. Steel Corp.
What looms ahead? Last week as Mr. Morgan sat on the Second Dawes Committee, he was undoubtedly pondering a fiscal operation beside which the half-billion-dollar loan to France and England would seem picayune. This project is spoken of as "Commercializing" the German reparations debt. By this is meant (TIME, Oct. 29) that long term "reparations bonds" may be issued against the resources of the German State, sold to the public, and the money used to pay off at once Germany's debt to the Powers.
This operation might involve the flotation of 30 billions of dollars worth of "reparations bonds," a task too titanic even for the House of Morgan. Collaboration would have to be sought from perhaps half the great financial houses of the world. Even then the project might prove unfeasible—possibly for political reasons. However, it is expected that in about two months' time, the Second Dawes Committee will have worked through its other problems to the point of deciding whether "commercialization" is practicable.
The major purpose of commercialization would be to transform the political debts of Germany to the powers into purely business debts to individuals. Then if by any chance Germany should go bankrupt or bolshevik, the bond salesmen would have made their commissions, the Great Powers would have their money, and only the individuals who bought bonds would be out of pocket. Though the roulette wheel of peoples and politics spins and spins—red or black the bank will win.
Conceivably, however, in the event of Germany's default the Great Powers would find it necessary to themselves to pay up the reparations bonds, if only to stave off a crash that might disrupt the fiscal world.
* Belgium, France, Great Britain, Italy, Japan, the U. S.