New-York tribune., 1920-05-17
Reichsbank Report
Shows Big Increase
I'm 1919 Turnover
Figures for Year Are ii
Times as Large as 1913;
Dealings i'm Paper Cur
rency Explain Result
By William c. Dreher
Special Dispatch to The Tribune

Copyright. 1920. New York Tribune Inc.
BERLIN, May 2.--Thc annual report
of the Reichsbank shows abnormal
figures for 1919. The total turnover
reached a scarcely believable figure
namely, 5,s77,0oO 100000 marks. This
denotes an increase of 1854, 100000 900
over 1918, and it was fourteen times
the turnover Of 1918.
The figures, which include both
sides Of the books, take on these fam
tastic dimensions chiefly through the
upon short-time Treasury bills--oper-
ations which were repeated over and
over again in the course Of the year.
These bills were rediscounted by the
big joint stock banks, and upon their
redemption new bills were issued and
rediscounted. Thus, in terms Of almost
worthless paper money, the turn over
Of the central bank make an exceed
ingly imposing impression. Such big
figures were never before used in prac-
tical finance.
The banks report has the following
to say in explanation Of the great in
crease in its turnover and the eXpan-
sion of its paper money circulation:
"Under the influence Of economic and
political conditions larger demands for
credit and btnknotes were made upon
the Reichsbank in 1919 than in the pre-
vious war years. AS 1t was not posi-
Bile to issue long-term or permanent
loans in the usual manner for meeting
the credit demands of the empire, the
floating debt grew uncommonly. If,
notwithstanding that fact, the pressure
upon the Reichsbank did not reach
greater dimensions than it actually did,
this Is due to the circumstance that
the resources of the German money
market could find productive employ
ment only to partial extent In ordi-
nary business, and therefore sought in
vestment on large scale in treasury
bills"
Increase in Note Circulation
The report then refers to the extraor-
dinary increase in the note circula-
tion, which rose from 22,1S7,s0 900
Of the year, besides 1880 900 900
marks in Darlehenskassen notes in cir
culatlon at the end of December. It
explains the increase thus: "The chief
causes for the expansion Of the circu-
lation were the steady rise in prices,
the increases In salaries and wages, the
extension Of surreptitious trading, the
out-go of money into foreign countries 3
for the purpose of transferring wealth
and for meeting payments on legitimate
and lllegltimate imports, heavy hoard
ing and payments in accordance with
the armistice and the peace treaty"
1t is mentioned that the gold cover
ing Of the note circulation dropped
the beginning of the year to about 3
per cent at its close. This change was
due IN part to the great expansion of
the circulation, but also to heavy re-
duction in the gold stock. 1t was re-
duced by more than half-that is. from
100000 marks to l,08e,500, 900
marks.
Gold Shipment Yields Profit
The disposal of 1,172,700,ooo marks
In gold, which was sent abroad in paw
ment Of food imports, yielded a profit
OF oO.0O00O0 marks, which appears
as new item in the profit and loss
account. Moreover, as the profits from
discounted bills jumped from 7s6.30O.-
600 to 1,e98,7oo,0OO marks, the gross
prohts amounted to a quite unparal-
leled volume, namely, 4,263, 3,00O,O 900
marks, as compared with 814,0O0,0
Net profits, however. were returned at
only 115,500,000 marks, or only 4,6OO,-
ooo marks more than for 1918. The
smallness of this increase is due to two
causes: Almost the whole amount re-
allied upon gold sales was set aside
as reserve against war losses, and
then 1,521,000,000 marks was lost on
| foreign credits through the deprecta-
tion Of the mark.
In the division Of the profits the
stockholders got only 15,823,ooO marks,
while the National Treasury got about
45O,oO0,o00 marks, most of which was
In the form Of special tax