NEUTRAL LOCATION OF INTERNATIONAL BANK CRITICISED

"The international bank makes the problem of reparations a really international one; the only criticism in my mind is, that the location of the bank in Germany instead of in a neutral country would have advanced its aims before actual operations were commenced".

This was the comment of Georges Frederic Doriot, professor of Industrial Management in the Graduate School of Business Administration when questioned concerning the new international bank to be located at Basel, Switzerland.

"The establishment of the bank was the only way of linking the nations of Europe, and of transforming the problem of two nations facing each other into an international one.

Young Plan Feature

"A bank for international settlements was made an integral part of the Young Plan for the payment of German Reparations," he continued. "From October 4 until November 14 a group of internationally known bankers has been engaged at Baden-Baden, Germany. In drawing up the statutes and the charter of the new institution. Details as to the statutes and the charter have been made public recently but the trust agreement, which provides how the new bank shall take over reparations work, cannot be completed until the Second Hagne Conference between the Powers.

"The new bank will be located at Basel, Switzerland; Switzerland having agreed to grant a charter which will not be repealed, amended or supplemented except in agreement with the organizing powers.

Guided by Bankers

"The authorized capital of the new institution will be five hundred million Swiss francs, divided into two hundred thousand shares of equal, nominal value, Subscription of the total authorized capital has been guaranteed in equal parts by central banks in Belgium, England, France, Germany, Italy and by banking interests in Japan and the United States. It is therefore apparent that central bank governors will guide the policies of the new institution. It is to be hoped that this factor will safeguard the interests of each of the nations concerned, will prevent the bank from becoming a political organization and will facilitate cooperation among the central banks.

Is Tax Exempt

"The objects of the bank, as stated in the first statute are: 'To promote the cooperation of central banks, to provide additional facilities for international financial operations, and to act as trustee or agent in regard to international financial settlements'.

"The bank is exempt from taxation on its capital reserves and profits and is immune from censorship, requisition, seizure or confiscation, in peace and war.

"In general, the new institution appears to be admirably designed to facilitate execution of the Young Reparations Plan and to promote financial cooperation among nations. It would seem, however, that the dissension as to the location of the bank was not very much in keeping with the 'spirit of Locarno'. It is to be wondered why, after all. Franktort or Cologne would not have been the logical location for several reason".