New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-10-02

lie war when first quotations range,
suggestion them gained wide clrculat
which previous to the wax was 23.S
Thousands Of persons in this country
.ere told that ie mark couldn't go
over and most ,,kely would recover
large part of IL loss Speculative
ouyirg soon began on a large scale. es
,ecially among Americans of German
extraction who knew Germany only as
going concern snnd were confident
.hat the recovery from the war would
90 sufficiently rapid TO cause strong
recovery in the value OF the mark. AS
matter Of fact the mark did show
signs of regaiaing some OF its loss and
his attracted an even larger follow
ing. with the result shat the value
worked steadily upward in the early
months of 1870. especially after the
sharp break in all foreign exchange
rates early n February Of this year.
In eIay the demand for marks was so
great here that rates advanced to
within small fraction of three cents
and that was the highest point
reached in the upswing. The graph of
he marks fluctuations since that time
s an almost steadily sagging line The
mark last week dropped below four
ifths OF q cent. the lowest point on
record, and which IS worse, from an IN
.ernaticDal point of view, is the fact
mat little hope is seen for a recovery.
The size of the sum lost by specu-
ators in this decline no one knows. but
It IS safe TO say that it would go
iong way toward helping Germany to
IL
November IS
In the light OF the past actions of
.he mark and present conditions, what
.len is the outlook for German cur
rcncy as weA as German internal
bends. which, because they arc payable
in marks. mose parallel to the ex-
change rates GA Berlin?
Factors to Be Watched
IN considering this problem several
factors must pc borne in mind:
German government expenditures
are in excess OF revenue, and adequate
tax measures, although planned. have
net bscn put into effect. Instead, the
deficit has so far been met by in
crcasing the output of paper cur
rencv. Such a procedure cannot
continue forever, and the government
realizes il.
Reparations payments, Germans
say. cannot be continued at the pres
eat rate without necesaitating re-
ceivership.
These payments must be made in
gold MARKS. or their equivalent, and
depicting German gold reserves fur
Their imperils the currency on which
tney are based.
Exports are still less than i'm
ports-a further need for increased
paper currency
Germaay's best pre-war customers.
Puss;a and Austria. are worse off
than herself Only South America is
on the DEBTOR side of the ledger. and
in inis case the amount is compare
lively small
The most apparent cause Of unset
Element. however, IS speculation in
Ilarhs and in German internal bonds,
si.ii carried on both here and abroad
on ,4rEe scale, although not 50 OK
tensivc IS IN the early part Of 1920
Reputable firms which handle Ger
man exchange and bonds almost unani-
r1ouslr advise customers not 30 pun
chase these securities except for spec
ol2tive purposes and even then they
make it plain that such transactions
src the widest sort of gamble. These
folks who keep in close touch with Ger
manv's financial situation are frankly
skeDtical Of a recovery II marks. The
orlr solution they can see is g new
currency They insist that the mark
Is raDiHlv ~oing the way OF the French
assienat Of the eighteenth century and
other worthless currencies.
Stability Needed
The new currency might for senti-
mental reasons still be called the mark,
but i would have TO be issued on
Stable basis and the government would
have 70 call in the Old paper currency
1t rate Of something like fifteen old
marks for one new one. Moreover the
government would have to cease max
ing ID deficits by printing paper
no re which in the last analysis is
the cause Of the increasing cheapness
Of marks.
Until Germany's financial structure
has been rebuilt so that the govern
raent can balance its budget, meeting
it's external obligations by means of
taxes that are not confiscatory, there
- little need Of q new currency; for
II the Berlin government IS unable to
meet is obligations now currency
would be just as weak and as sus-
ceptiblc to collapse as the present
mark.
SOM observers insist that the solu-
ton ia in the hands Of the Repara-
tons Commission. or the various Allied
governments and some are optimistic
expectcG from tire coming disarmament
conference in " Washington next month.
They frmiy believe ,nat Germany must
be given moro time 20 recuperate or
further repara.ions payments viii be
impossible KxactnR payment By force
would only make conditions worse, for
j. would result IN virtually placing
Germany % the hands Of receiver.
they contend Because Of worldwide
trade usce rtainties, they feel that the
Berlin government should be helped 10
come extent before conditions become
a bad 10 Germany Is they are in
Austria.
Selling Marks
what eventually wall be donc TO solve
Cermany's problem IL for the future
to tell, oat indications point TO the
fact that something will happen soon.
Reports from Berlin snow that Ger
mans through the country are convert
ing marks into tangible property as
5ast IS they can. They are buying for
eiyn securities, real estate. industrial
stock, pfeciou, stones and je"elry.
Sto-sh selling diamond remain open
far sd - the ght and are doing u big
business, according 10 reports from
Berlin. This movement ig behind the
ftcr7i. bull market on the Berlin
roAva. ia which industrial stocks