The New York herald., 1920-11-07
GERMANS FEAR
LABOR capital
FIGHT TO FINISH
Bankers Accused by Manu-
facturers Of Plotting to
Bring on Crisis.
LOANS ARE WITHHELD
Plants, Unable to Borrow
Money, Are Compelled
to Shut Down.
PROTEST BY GOVERNMENT
LEADERS Say They Keep Back
Funds From Concerns Not
Worth Living.'
PROTEST. BY GOVERNMENT
Nv RAYMOND SWING.

BY RAYMOND SWING.
ussoSuy Coble 20 THE New YosR HEaArD.
s,srywScAe, 1890, ey THE NEW YORK HEnALr.
New York Herald bureau,
Berlin, Nov. o.
Tho question Of credit has opened q
great chasm between a large group OF
German manufacturers on one side
ana German bankers on the other.
Meanwhile plans for a reorganization
Of industry, for simplifying purchases
ce raw materials abroad and for estab-
fishing industrial credits with banks
ars nearly as much discussed here as
II socialization.
The bankers convention devoted its
last day to proposals made to relieve
manufacturers from the so-called credit
monopoly Of the banks. In this con-
nection, industrialists complain that
dozen large German bankers hold oil
German industry In a life and death
grip--at least all industry gave the
largo corporations. Indeed, these large
concerns can raise capital through the
xaie OF stocks and bonds. but private
firms must borrow from the banks.
Thus borrowed money. as result of
che inflated prices IS a decisive factor
with every manufacturer. Without
credit ha is unable to buy raw ma
tsrials abroad: without credit he can
not afford to keep his stocks Of either
raw goods or finished materials. The
amount OF money borrowed. arith-
meticaliy at least, IS many times
greater than the original investment.
Money Concentrated. In Charge.
The aspersion is heard here frequently
that German banking interests have
been abusing the credit monopoly they
control through the process or Industrial
concentration At the same tirne It Is
bluntly charged that shey are squeezing
out the small manufacturer by refusing
70 lend him money. Also another
motive is said to be behind this alleged
policy. As the small Industrial plants
are closed down the number OF unem-
ployed Is increased. and this. II Is
charged. is being done systematically In
order TO bring to head the fight be-
tween labor and capital here this winter.
The charge is so grave that, obvious
fy. n In impossible TO get the facts to
mhstantiate it. But that innumerable
factories have been forced to close re-
Gently Is an established fact, and the
phrase, "an Industrial catastrophe" IL
now heard throughout AL Germany.
AZ meeting OF German economical
leaders held here recently the principal
speaker declared that he was not one
who believed that Germany could DO
saved by a policy OF Industrial catas-
frophe."
It IS extremely improbable that
majority Of the German bankers are
working actively 20 force the Issue with
labor, but many competent observers
here believe It bes. to settle the labor
question as soon as possible and once
scheme for forcing an Industrial
calamity to work TO this end has served
90 bring the entire German banking
rrcrid into suspicion.
Combines Grow I'm Power,
An increased concentration of indus
Cry. whether or not sbetted by the abuse
Of the so-called credit monopoly by the
banks, is beyond dispute Tho entire
German sheet metal industry 10 now un-
der control OF Ottoman Strauss, who, az
head OF the Cologne firm OF Otto Wolff.
became ono OF Germans wcnlthiest men
stein Is cotton king and controls all save
q few plants In the textile industry.
The rapid encroachment OF dominant
personalities like Hugo Stinnes and
Herr Strauss Is a sign OF the times here,
hut finally a protest was raised by the
smaller industrialists against the banks.
The demand was voiced for a new sys-
TEN OF credit whereby the manufacturer
would bo entitled TO receive loans. not
solely because he had property enough
20 guarantee the payment OF the loan.
but because he would use the money he
Borrowed 20 manufacture goods which
wero socially useful. At the same time
The demand was made that such loans
should be based on his personal ability
20 pay and not on personal property.
Tho protest was carried to the public
when the German bankers violently at
eacked the scheme to use municipal saw
ings 10 stabilize industry In this country.
The so-called Giro-Centrals control
bank deposits. which have grown enor-
Ynousiy since tho beginning OF the war
and which now probably amount to
10000. 600. 900 marks. which they are not
authorized TO invest In other than first
mortgage, gilt edge municipal securities.
Why not put this money TO work in Ger
man factories? Industrial leaders de-
rnand
Bankers Give Their Defence.
Thereupon bankers warned that the
public savings would be used up TO
bolster business ~ that tho banks would
Become unsound and that tho men be-
hind tho scheme were hoping for personal
profit from It They declared they had
blenty of money to lend and wers not
refusing credit
II is estimated that German bank de-
posits range from 10000 100000 marks
10 100000, 900 marks. Call money is
quoted at Q per cent, which ie cheaper
than In America.
Some of the men behind the scheme
for authorizing savings institutions to
lend money for industrial purposes are
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Confined on Tifth POGO