The Washington times., 1919-10-02
B0erSianer'S
Comment
on Business
By BOERSIANER.

Whenever the German mark
weakens proportionately under the
weakness of other exchanges, some
dealers and others go far afeld
for the cause. An intrinsic eX-
PLANTATION lis sought when an cX-
trinsic explains better.
In no money has speculation been,
and is. rife and extensive as Ger
man. Since the armistiee individual
banks have bought-and sold-mil-
lions. the British, Dutch, Scandi-
navians, Spaniards and even the
French have gone into marks
heavily: commitments long, commit
ments short Calls may be bought
TO the end OF 1920. These transac-
tions are in addition to the large
amounts Of German currency held in
the neutral countries of Europe de-
rived from the sale of goods to the
Germans during the war.
The condition considered, the won
der is that the mark does not fluctuate
more widely and violently; for the
purchases and sales are frequently
predicted on rumors OF added eco
nomic theories aired by economists
more or less eccentric, conflicting ad-
vices as to the actual state OF affairs
in Germany or the prospects OF the
new republic.
Had Stuff To Sell.
Clearly, Germany had certain stuff
TO sell when the ban was lifted; as
clearly that German commercial trav-
elers are busy soliciting orders abroad
for specific articles. But it is equally
obvious that Germany needs an enor-
nous amount of raw materials, such
as cotton, cotton yarn, wool, rubber,
copper. tin, and is not YET, by IS per
cent in a position to import what she
requires; which brings the question
of her fiscal creditability to a point.
II Germany's present and near fu-
ture credit were to be based on the
6 old she has on hand-oF her ability
to get the yellow metal shortly-she
were in a sad plight But in a post
war period, credit or prospective eco
homie strength is not bottOmed on
the gold in store. Its basis is produc-
tive pOtentiality.
Where a country's productive power
is not developed in a high degree, it's
currency may mainly rest on its hold
ings OF gold, as. for examples, Spain
Just now and Holland continuously.
Failing this, then upon such produC-
ing ability as il may possess. Pro-
ductive power following an exhaust
ing war is the basic and decisive fac
tor. The possession of gold Is, in
way, luxury. |
Indemnity Liability.
II, then, Germany is accorded what
she must have in raw material-oth-
srwise credit-and IL the coal pro-
visions Of the treaty are modified, she
nay face the contingent indemnity |
liability with less dismay and make J
rood the expectations OF the hordes |
Vho are speculating, bUllishly, in the /
mark.
The coal provision. however. is cru
laL Beginning yesterday, the treaty &
tlpulates that Germany must deliver /
70, 600. 900 tons annually to the allies
IN authority in Frankfort estimates
hat this leaves to Germany about
O'OOO,OOO tons per year for her own
.se-less than a fifth Of her peace
lme yearly consumption. She pro-
uced l9l 100000 tons in 1913 and
sea 100000 tons at home. II
ne loses Upper Silesia, as well as the
aar and the Aachen regions as coal
ources, the loss leaves her at.
eace-time rate Of production Of Ios-
10000 tons.
Production Reduced,
But the present lowered strength
nd productivity of German work
rs the shorter work hours and. the
ltermittent strikes have reduced the
reduction to 55 per cent that OF
eace times, or about 10000. .OGO tons
er year. The peace treaty obIi-1
ates Ger5any to deliver more than
alf OF this to the Entente. Assuming
lat the amputated regions ac.
ounted for a quarter OF the coal
assumption OF 1913, her need wouJd
e for 100000 tons a year.
Against this she will have SO. OO0.-
tons. Germany would have
enough coal TO run the rail-
avs on reduced schedules without
roviding for heating homes or run
Ing industries If the terms Of the
'eaty be strictly enforced. For the
AXE Of what Germany already owes
le Entente-aside from the cash in
smnity-the eXactiOn must be re-
.sed. Allowed enough coal and
efficient credit the present price Of
le mark were a bargain. These are
'rioUs contingencies. But the very
.ct that the German mark is be-
'me a world wide counter specu-
lively suggests a universal beIief
Germanys recuperative power.