New-York tribune., 1918-03-02
Rise Of the Mark

The German press is pointing with no
little eXutation to the improved standing
of the German mark in neutral markets.
Tables are given showing a remarlIabl2
rise in German exchange at Stockholm,
Amsterdam and other cities during the
final two months of 1917. At about the
end of October the mark had dropped to
its lowest level in nearly all markets, but
after that an Improvement began. By the
end of the year the quotation for the mark
had made such gains as, according to the
German press, were quite without parallel
in the history Of international finance.
Thus, at the end Of October the mark
had at Stockholm only 50 Y per cent of its
normal value, but by the end of December
it rose to 67la per cent of normal. SINH
larly, the rise at Amsterdam was from
30.55 to II per cent. During the same
period the price Of the American dollar
bought in Germany through exchange op-
erations in Holland dropped from $50 to
S marks.
The German press was quick to inter
pret this movement as a harbngcr Of
peace. The outside world-so the Teuton
editors read the sgns--had suddenly
changed it's estimate of Germany's mill
tary outlook in view of the collapse of
Russia and the defeat of Italy Specu-
lators abroad saw Germany gaining along
the whole line, foresaw a peace in Ger
many's favor and were already speculat-
ing upon the early return of the German
mark to something like it's normal level
Hence their slogan: "Buy marks and get
rich."
But the German financial editors mani
festly overdrew their political account in
Interpreting the phenomenon. And, curl
ously enough, it was these editors them
selves who supplied the proper corrective
of their own exaggerated emphasis upon
the political factor They tell us that
Germany made economic arrangements in
October with several Of her neghbors, in
cluding Switzerland Holland and the
Scandinavian countries, by which she
agreed to supply them with coal steel and
certain other commodities which they III
dispensably needed. I'm this way Germany
was able to accumulate balances to her
credit in the banks of those countries, and
could draw against those balances in pay
ment for purchases of foodstuffs.
This economic arrangement alone might
suffice to explain the whole Improvement
in the German mark, but the data are
lacking from which any definite conclu-
sion about the matter might be drawn.
Moreover, the German papers supply ar
other explanation in addition to the one
Just given. The very excess of specula-
ton for the further fall of the mark pre-
pared the ground for sharp reaction.
Such large sales Of the mark for future
account had been made that, as we would
say, the market had grown topheavy and
any possible factor was likely to knock
away its props. That is what occurred at
Stockholm, at Amsterdam and at Zurich.
Then, just as soon as the tide turned, there
was crazy rush to buy marks by people
who, by all their training and experience,
know nothing whatever about exchange
movements, and least Of all are qualified to
Judge of the complicated political prob
lens helping or hindering the prospects
for peace. Thus, Zurich newspaper, re-
Gently discussing the wild speculation in
German exchange there, complained that
everybody, from business men down to ser
wants, was gambling in exchange Where
a market falls into the hands of such elc-
ments it is as idle to seek weighty reasons
Tor price movements as TO assign high DO
litical significance to them.
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