The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1916-04-24
Outside Observers Puz-
lied As to That Ma
tons Condition
INITIATION NOW
EXISTS, is BELIEF
Manner of r a isin g
Loans Indicates Pyr-
amid of Credit

Just what the true monetary con-
ditions inside Of Germany are today
II . puzzle to outside observers,
comments the wsll-st. Journal. That
. condition OF imitation exists. no one
seems to deny, and although bankers
feel convinced that something Is
wrong. they cannot exactly put their
finger on the trouble The fact is
that statistics OF banking and cur
rency made public by the German
otncials contain In themselves moth
Ing alarming, which conveys the i'm
precision that everything IL done to
hide or suppress the real state OF
affairs.
The statement Of the Bank OF Ger.
many. which u published from time
to time, shows that even II the bank
no longer continues the same rate
Of increase In IL gold holdings IS
characterised ifs operations in the
early stages Of the war. II, At all
events, u holding on to its supply.
Its present gold reserve II about
$615. 900. 900. which IL about twice
its holdings At two years ago. Cir
culation, however. stands at about
81 800 ,000, go or over three times
what was reported before the war.
Its proportion Of gold holdings TO
circulation today II shout SO per
cent against IS per cent two years
ago.
But Il n generally admitted that
the coalition Of the Reischbank Ia
not the real criterion - regards in
fiatiou In Germany. The loan banks
and other institutions which were
vssted- with the power 10 issue cur
rency embody the real elements Of
imitation. Hero again ofncial figures
fyom Germany fail TO subetantiate
tn views held In the outside market
q regard to the operation Of these
INSTITUTIONS. According to German
cncial statements the loan banks
have not issued such an amount Of
a would suggest any great
menace to the economic structure In
Shortly after the war broke out
the loan banks were authorized to
Issue . maximum amount Of 1.500.-
000, 900 marks Of such notes. Sub
seQuently the limit was Increased TO
3 900 ,000. 900 marks, but only on .
few occasions has the original limita-
lions been exceeded. At the end Of
1914 q total o. 1917. 900. 900 marks
Of these notes were issued, of which
~, 0O0, 600 marks were In circula-
ton and 81, ZOO. 900 marks held by
the Reischhank. For several weeks
. considerable reduction was sppar-
emit In the total amount issued, but
they rose again TO 1878, 1000. 900
marks in April last year. Not until
the end OF December was this figure
again reached when the total amount
outstanding was Increased to 1,700.-
900 marks, with $50, 900. 900 marks in
the Reichsbank and $4,000, 900
marks In circulation. These vary
Ing amounts reflected the Issuance Of
war loans. They appear TO have
been reduced again shortly after.
ward.
After making every allowance for
tremendous sacrifices on the part
Of the German people. which have
undoubtedly marked the subscrip-
lions to the war loans. II 10 dimcult
to believe that there should not be
further evidences Of imitation than
Indicated BY these ngures. It L.
hard 70 suppose thst Germany
which 10 not . phenomenally rich
country, could be subscribing for the
enormous war loans without resort
| % some extraordinary method Of
| financing. which is their essence
contain the pyramiding Of credits.