Baden-Baden Bankers

Most people who go to Baden-Baden do so to quaff curative quarts of German water, tone up their livers, rest. But last week in the sumptuous Hotel Stephanie potent bankers from seven nations continued to defy all restful rules. Night after long night they kept the Grand Ballroom blazing behind locked doors until nearly dawn. Chairman of these occult doings was driving, restless Jackson Eli Reynolds, President of the First National Bank of New York.

With colleagues representing the great central banks of Britain, Belgium, France, Germany, Italy and Japan, brisk Mr. Reynolds was trying to whip into shape a charter for the new Bank for International Settlements (TIME, Sept. 23) which under the Young Plan will handle German Reparations payments, issue Reparations Bonds. The Chairman's attitude: "We will go on until we have finished. This is a woodcutting job. There is going to be nothing spectacular about it and very little news."

Certainly there was nothing spectacular last week in the wilted mien of Belgian Banker Leon Delacroix as he went up to bed from the busy ballroom well after midnight. Nearly all the European delegates looked tired as spaniels. Distinguished M. Delacroix affects smartly upturned moustaches. Now they drooped. As he disrobed, the onetime Prime Minister of Belgium and the only original member of the Reparations Commission who remained a member last week sighed to Mme Delacroix, "Helas, I am not so young."

Anxiously Mme Delacroix listened to her husband's breathing. She remembered that when the Young Plan Committee was sitting in Paris, Britain's great Banker Baron Revelstoke had gone to bed similarly weary and died of heart failure before dawn (TIME, Jan. 14 to June 17). Banker Delacroix's sleep seemed normal, however, and soon his wife was asleep too. About 5 a. m. she felt his hand on her shoulder: "I am feeling ill." To the telephone flew

Mme Delacroix. Meanwhile her husband rose unsteadily and she had to put down the instrument to help him into an arm chair. The sleepy switchboard boy seemed to take eons to raise the hotel doctor. Before he arrived the heart of Leon Delacroix had stopped.

In the ballroom next morning there were eulogies. Cried Banker Delacroix's colleague, Belgian Delegate Louis Franck, "He died like a soldier on the field of battle, but more happily than a soldier, for he fell not in cruel struggle but in the service both of his country and mankind!" Other delegates were as meaninglessly effusive. Then spoke blunt Hjalmar Horace Greeley Schacht, famed President of the Reichsbank. Recalling the hate-pregnant past, when Belgium's Delacroix came to Berlin directly after the War as a trustee for German railway bonds and a mem ber of the commission which revised the statutes of the Reichsbank, gruff Dr. Schacht concluded with visible emotion: "I must say that the gentle and moderating influence of Monsieur Delacroix did much to remove our post-War difficulties." Humanitarians recall that during Leon Delacroix's two years as Prime Minister he wangled through Belgium's obstreperous Parliament the eight-hour day, universal suffrage, tax reform and the temperance law.* After adjourning for one day to mourn Belgium's Delacroix, the bankers got back to their ballroom, soon rounded out a major portion of their labors by announcing that they had reached agreement in principle on the following attributes of the Bank for International Settlements (now begin ning to be called the "Young Bank"). Capital to be $100,000,000 as envisioned in the Young Plan. Board of Governors to comprise: first, six Governors ("Bix Six") representing the central banks of Britain, Belgium, France, Germany, Italy, Japan; second, two U. S. Governors ("Big Two") elected by the "Big Six"; third, six more Governors ("Little Six") each selected by one of the "Big Six" from his own country as a representative of local business, industry; fourth, it is envisioned that additional countries may obtain a share in the Bank's capital and each of these may submit four nominees for Governorship from which the Board will choose two Governors.

Reason why five Europeans and one Asiatic will elect the two representatives of the U. S.: the Hoover Administration has negatived repeated proposals at Baden-Baden that the U. S. Governors should be named by the U. S. Federal Reserve Board. In thus eschewing even fiscal "entangling alliances" the U. S. keeps the freest possible hand, appears to have no fear that Europe and Asia will ever elect a Governor unacceptable to Washington.

Chairman of the Board to be elected by the Governors for a term of several years, indefinitely renewable. Expectations at Baden-Baden were that a U. S. citizen would be elected Chairman, might find the office a lifetime job.

Negative Decision. The bankers were agreed last week that the B. I. S. (Bank for International Settlements) shall not issue notes or create credits, shall merely transfer, distribute and mobilize existing credits. It will be a clearing house for Reparations, not an international bank of issue, not a competitor with the great central banks as some have feared. Consequently the B. I. S. will have only a small gold reserve, since the sole worth of a large reserve is to back notes or credits.

Veto. Also envisioned in the Young Plan was a veto proviso drafted last week at Baden-Baden to give the central bank of each nation power to limit or prevent any transaction of the B. I. S. in the country of the central bank in question or in its currency.

The U. S. Federal Reserve will, of course, enjoy this negative power in common with other central banks, though debarred by Washington from "entangling" positive potency.

Stumpers. There was no agreement last week as to the city in which the B. I. S. shall be set up. The British continued to clamor for London, the Latins remained violently opposed. The delegates were also stumped to find an adequate authority for setting up the B. I. S. at all. Perhaps it would require a multilateral treaty among all the Powers concerned, and that would mean finding a weasel way around the expected unwillingness of the U. S. to sign. Questions involving the minor powers and personnel of the B. I. S. proved additional stumpers. Even hustling, driving Chairman Jackson Eli Reynolds opined that the bankers' work would be finished barely in time to be submitted to the politicians and statesmen of the Great Powers at a conference now scheduled for Nov. 10.

*Beers and unfortified wines are encouraged, stronger potations drastically restricted as to time, place, quantity sold.