The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-10
Financiers Fight Move by
Warming German People
i'm Advertisements.
CAPITAL FOR FACTORIES
DR.. Scholtz Seeks Means to
Use Savings and Build Up
Nations Industries.
BY RAYMOND SWING.

Staff Correspondent Of THE HERALD.
Copyright, 1920, oy TIE NEW YORK HEaALn.
BERLIN. Oct. 9.-Strife between Ger
man bankers and the Ministry of Eco
Monies has been carried to the public
by the bankers in that they have re-
sorted to newspaper advertising to
warn the German people against the
Governments scheme for municipal
savings banks to establish fund out
OF their deposits to tide over manufac-
turers who are unable to obtain bank
credits during hard times.
The scheme was evolved by DR..
Scholtz, Minister Of Economics. who,
when Mayor of Breslau and Chariot
tenburg, became familiar with condi-
lions obtaining in municipal banks
His suggestion is to open credit de-
partment in the so-called Giro League
kind of limited clearing house or
ganization of municipal savings banks
Many of these banks have plenty of
money, but in Prussia and several
other States they are not authorized to
make investments save In first class
State and municipal loans. while they
are prohibited from investing in indus
trial undertakings.
Industries Need Money.
1t is now considered by many COM
petent critics that Industrial investments
are as secure, II not more secure. In
Germany than are national or city
bonds Indeed, the state and the cities
are burdened with about 100000, 900
marks monthly IN payment Of unem-
ployment insurance, and the Govern
ment has promised to Increase these
relief payments. Also unemployment Is
growing, due to the closing down of
many branches of industry which might
continue to carry on IL they could OBJ
tain credit.
The policy of the banks has been to
refuse many long term credits except
at the price Of discounting assets. They
prefer to have manufacturers raise
money by issuing bonds and by increase
Of capital stock. The Government e
scheme is to utilize the money In the
municipal banks to tide over factories
which are unable TO obtain aid from
other banks. and thus to avert the
closing OF many additional plants. at
the same time sparing the public an in
creased unemployment levy
The National Giro League. which Is
| the central organization OF all tne pro
vincial leagues. was founded In III
with nominal capital stock OF 100000
marks. which could be increased. the
Government believes, by the money
which Is at present being paid for un-
employment and by the capital of the
semi-official war emergency societies
which are now being dissolved.
Conference with bankers.
The banks are aroused because they
regard the scheme as an encroachmen'
on their legitimate field. In their news
PAPER advertisements they declare they
have supported German industry by lib
eral credits where conditions warranted
| The Minister of Economies called lead
| ing German bankers into conference
Yesterday and explained to, them that Il
was not the intention OF the Government
| TO compete with the banks.
A small committee of prominent f1nan'
ciers was appointed to draft plan to bs
laid before the National Economic Par
Lament at its Forthcoming session.