New-York tribune., 1919-06-27
Cermany's Joint
Stock Banks i'm
Critical Position
Hold Huge Amounts of
Paper Discounted for
National Treasury and
Also for Various States
Nesc York Tribune
Special CORES porderce

Special Cores pordefce
BERLIN, June 15.-The returns of
the eight great joint stock banks of
Berlin (not including the Reichsbank)
for 1918 are Of more than usual in
terest, showing as they do the financial
and general business tendencies in Ger
many during the final year of the
war. A compilation of their returns
shows total capital, including re-
sources, of 1,926.50O,oO0 marks (it is
useless to convert the marks into
dollars, owing to the varying and
greatly deprecated value Of German
currency.
Two Of the most striking facts made
apparent by the returns are, first. the
great initiation; and second, the sharp
Increase in the costs of doing business.
Owing TO the enormous issues of paper
money, the deposits Of the banks
reached the abnormal level Of 20,660,-
100000 marks, which denotes an in
crease of 1850 100000 for the year
stocked with paper circulation; that
people, unable to use it, deposit it
with the banks; and these institutions,
also unable to find profitable employ
ment for it, are unable to prevent it
accumulating in their vaults. This diff
iculty of finding employment for de-
posits is evident from the fact that
the amounts loaned as margin on stock
operations, with a total of 2,064, 900
marks, was only 1872, 100000 greater
than at the end of 1917.
Two Significant Items
The total sum in discounted bills
was 1882, 100000 marks, which means
a gain of 4,369, 100000 marks. In normal
times this would signify a great ex-
panslon of commercial business; but it
is known that this item is now COM
posed chiefly Of paper discounted for
the National Treasury and for the
various states. Besides this item, the
banks returned a total OF $4,000 900
marks in domestic government loans,
icing an increase Of 191, 100000 marks
ayer December, 1917.
These two items have a peculiar
signliicance just now. in view of the
fact that the Imperial Treasury, as
financial experts here predict, will very
Of the terms OF the peace treaty. To-
gether they amount to 12,474 900 900
marks, which is almost seven times
is much as the total capital and re-
serves of the banks. From this fact
/ may be seen what the suspension
payments by the Treasury and the
states would mean for the banks. It
must be remembered, too, that the
peace treaty establishes q first claim
upon all national and state revenues
for purposes Of reparation and pay
ments to foreign pensioners; and that
the amount of reparations alone to be
paid during the next two years is far
IN excess of the net earnings of all the
German people during the two most
prosperous years just before the out
break OF the war. That under these
circumstances, together with the greatly
reduced earning capacity of the people
at present, no revenue will be left over
with which the. Treasury can meet it's
obligations 20 the banks, is a practical
certainty.
Big Expense Increase
great increase in the costs of
doing business is another fact brought
out By these returns, having an cmin-
Gus bearing upon their future earning
capacity Their aggregate gross earn
lngs, indeed, showed a gain of 67,-
sVe oV0 marks last year in total of
4oo'oeo'oo0 marks; but this gain was
more than swallowed up by the in
crease in expenses Of operation;
taxes, salaries and general expenses
aosorbed 235,300.000 marks, or 73,3OO,-
ooo more than 1917. For 1917 those
costs had been equivalent to 47.o per
cent cent OF the gross earnings, but for
TI lSls they jumped to SIS per cent.
ihs was partly due TO higher taxes.
out chiefly to large increases in
salaries. For the current wear this
latter item will bulk still larger. owing
to the fact that the great strike Of
!nank employees here in April resulted
10 further considerable advance in