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To: JF Quinnelly who wrote (342)	6/19/2001 10:39:30 PM
From: Ilaine	Respond to of 443

I think I am on the right track - just read an account of a telegram from J.P. Morgan from Paris to Leffingwell at the New York office in March, 1929, during negotiations to set up the Young Plan for reparations, expressing concern that a breakdown in negotiations would imperil the gold standard, a view apparently shared by Gov. Harrison of the New York Fed expressed to Sec. Treas. Mellon, and by Atherton, charge de affaires, American Embassy, London, to the Secretary of State. Caused by the perceived/alleged inability of the Germans to pay - which meant paying the tremendous amount of money they borrowed from 1924-1927 - US interests quit lending German interests money in 1927-1928, partly because everything was being sucked into the stock market, partly because the Germans were perceived as bad credit risks. Which, of course, they were. I think a book could easily be written - maybe already has - about the contortions and gyrations the Germans went through to avoid paying reparations. The path from Versailles to Hitler is labeled "reparations." The cause of the hyperinflation was trying to evade reparations. Now the tangent of Rationalization is calling me, bright and full of promise in the gloaming.