The morning call., 1891-11-09
THE FAILURES IN BERLIN.

Inc bank failures IN Berlin are not cal
culated TO strengthen confidence in the sta
bility of affairs in Europe 1t will be re-
membered that nearly twenty years ago the
payment of the French war indemnity OF
$1,000, 000,0 900 stimulated speculation in Ger
many till the whole business community
lost their heads. Banks which were not
needed, corporate institutions which had no
excuse for existence, were established by
the hundred. and after a burst of furious
excitement like the one which was caused
in this country by the issue of green backs
during the war, the mania eliminated in a
general cOllapse. 1t took some years to clear
away the wrecks, but when that jobwas done,
say about 1878, German finance seemed once
more to have got upon solid basis. Then
Bismarck began his tricks in the silver mar
ket, in the sugar refining business. and in the
adoption of policy of German colonization,
and after a while initiation was resumed.
Speculation in securities of probematical
value became general. Every body sought a
short cut to wealth. The old German
habits of frugality were dropped. Berlin
proposed to vie with Paris in ostentation.
The Government encouraged lavish expen-
ditures and adventurous enterprises. Bis
marck declared that he would make Berlin
as -lt dl Il AudlICldl GSLlt rs LUuuUl UT New
York.
Unfortunately for his schemes Germany
is not a rich country. It's soil is not pro-
ductive. and its industries when left to them
selves cannot compete with those OF Bel
GUM and France. Wages are low and
workmen have no savings to invest in
stocks. General business rarely yields any
thing beyond a bare living. Hence the en-
cellUr's lead, and tried to make Berlin a
speculative center. found that there was no
one behind them. In this country, as in
England and France, when bankers sub
scribe for new issues of bonds or stocks,
they can reckon pretty confidently on the
public coming forward and relieving them
of the securities they have bought. 1t is
not so in Germany The Berlin bankers
found there was no home market for their
bonds and stocks. They had to send them
to Amsterdam and London aud Paris in
quest Of purchasers. And in these great
money marts buyers either hung back or
demanded concessions which the sellers
could not afford to make. TIE Berliners
found that they had unconsciously made
permanent investments.
The end was inevitable. BY dexterous
financiering it was postponed for years, but
at last there came time when Hrshfeld
and Wolf, and following them Friedlander
Il Sommerfeld. had to throw UP the sponge
Their capital ana large share of their de-
posts are locked up in unavailable securi-
ties. Upto the present time there has been
no whisper against the greatest of the Ber-
lin bankers, Beichroder; but he cannot
feel comfortable. Before the present trOu-
Ia =. - mil hi, 7,
all the bankers of Germany are more or less
involved.
Some of the Oldest merchants and bankers
in this country are of German birth; yet in
Germany finance is almost an occult science
When the first Frederick William accumu-
lated money for the wars be had in contem-
plation he kept the coin in kegs in his cellar !;
and to this day the old stocking is the favor
tie bank OF deposit among the German work
ing class. There are some IL, 600 900 people
in Germany, but there are only eighteen
banks which are allo wed 10 issue circulating
notes. Their aggregate paper issues amount
to about $500, 900, 600, their coin reserve to
S254, 0CO,000 in round numbers and their to-
tai discounts to Sl9l, 100000. The figures
indicate a sluggish commercial movement
and lack of confidence in the banks.
LUIS may, duu pIODdOIS uOes, dElSt from
4 general distrust Of the polly to which the
Government seems to be welded. Germans
are toe hard-headed people to believe in
wasting the substance of the nation for the
maintenance of an army against France
and though the author of this policy has
been relegated TO private life his successors
do not seem to appTehend the cardinal error
OF his doctrine or to be disposed to revert
to sound principles. The spasmodic out
breaks Of the wel-meaning but excessively
juvenile Emperor are not calculated TO in
spire confidence. He seems to be full of
utopian notions. which are very pretty in
theory. but Of which experienced men per-
Ceive the utter impracticability. His visions
of g millennium, in which every body shall
be happy except the French, are not Of a
character to promote confidence in the Sta
bility of his regime; hence, perhaps, in
large measure, the extreme dizziness in busi-
ness and the consequent failures among
bankers in Berlin.