Tycoons' "A" "B" "C"

No really rich and potent tycoon likes the idea of sitting on a "sub-committee," and so last week the three sub-committees of the second Dawes Committee--now sitting in Paris to revise the Dawes Plan (TIME, Feb. 18, et seq.)--were rechristened "Informal Groups."

When the odious "subcommittee" ghost had been pretty well laid, it was revealed that for almost a week previously John Pierpont Morgan had been sitting in on an informal group chairmanned by Baron Revelstoke, the softspoken, intensely aristocratic tycoon who heads the great British banking firm of Baring Brothers & Co., Ltd.

It very soon appeared that this informal group was the inner banking circle of the committee--for with Mr. Morgan and Lord Revelstoke sit Dr. Carl Melchior, partner in Germany's great house of Warburg, Belgian Tycoon Emile Francqui, and Economist Antonio Suvitch, personal representative of Benito Mussolini.

The mere announcement that this informal group exists stirred up such a news flurry that the tycoons, cautious, kept their intentions secret for most of another week, while news-starved correspondents were fed titbit after titbit about what the group was preparing to do. Meanwhile Mr. Morgan ran over to London, as he said, "for a cup of tea"; and various other delegates paid flying visits to their homes. When everyone had gotten back from wherever he had gone,

Baron Revelstoke appeared as rapporteur for his informal group before a secret session of the second Dawes Committee and made an oral statement* understood to be in substance:

1) The informal group suggests that the payment of German reparations be administered by a corporate trusteeship on a strictly business basis.

2) The corporate trusteeship to be called the Reparations Settlement Institute, and to be constituted as an international banking corporation.

3) The new institute to absorb all the functions of the present Agent General of Reparations, Seymour Parker Gilbert, and of the Reparations Commission and the transfer committee.

4) The institute to hold as trustee certificates of indebtedness indorsed by Germany and classified as "A," "B" and "C" certificates.

5) The preferred "A" certificates to be issued in an amount representing a sum for which Germany would be unconditionally liable. Next, the "B" certificates to represent what the creditor Powers expect to obtain directly from Germany in cash transfers. Finally, the "C" certificates to cover what the Powers expect to obtain in kind, that is, in transfers of raw materials.

6) The Institute to have power, at the absolute discretion of its board of directors, to issue bonds against the security covered by the "A" certificates only, and to devote the proceeds to repaying the creditor Powers. The series of "A," "B" and "C" certificates to be issued substantially in the form of promissory notes of 1,000,000,000 marks each ($250,000,000), and these notes to be cancelled one by one as Germany pays her creditors billion after billion in each of the three ways outlined, namely from the proceeds of bonds, by cash transfers and by transfers in kind.

7) The all-potent board of directors of the Reparations Settlement Institute to consist of one "financier" (not a "statesman") from each of the Powers concerned, thus removing the whole gigantic operation as far as may be from the sphere of politics.

Though these suggestions from the informal group were received with a consideration amounting to homage, last week, they cannot be acted upon until the "political" question of how much (Germany is going to pay anyhow is dealt with by the second Dawes Committee. During the week Sir Josiah Stamp's sub-committee (TIME, March 4), now to be known as Informal Group No. 2, was wrestling with certain political aspects, while others were being haggled over in Informal Group No. 3, chairmanned by Bostonian Lawyer Thomas Nelson Perkins, who is the alternate to Chairman of the Second Dawes Committee Owen D. Young.

In a word, the tycoons were still warming up last week, though Chairman Young did all he could to get action by suggesting that hereafter the three informal groups hold frequent joint sessions and collaborate on a single all-embracing plan.

, -No stenographer present, No minutes kept.