The New York herald., 1921-01-20
TRADE RECOVERY
| OF GERMANY SETS
ASTOUNDING PACE
Basis of Sound Economic
Structure Seen by q. S.
Bankers Abroad.
REIGN OF PROSPERITY
Position in Foreign Mar
kets Already Command
ing Attention.
BANK REPORTS SPEAK
Fixing of Indemnity Will Find
Country Financially
Reestablished.
'ANK REPORTS SPEAK

Confidential reports received from
abroad by American bankers and mer-
chants in the last few weeks furnish
the basis for predictions in reliable
financial quarters that the economic
recovery of Germany is proceeding at
pace which, when all the facts be-
come known, will astonish the world
even more than the recovery Of France
after 1870.
OF the many facts which prove the
headway being made by Germany two
stand out as a new criterion FOR inter-
preting the official statements and
news dispatches reaching this side:
Germany is prospering internally
beyond the widest dream of even her
most optimistic business leaders and
is recouping her position in the for
eign markets in degree commen-
surate with her internal activity.
Through various ingenious devices
the foundation Is now being laid
which will, as soon as the indemnity
is fixed definitely by the allied Pow
ers enable Germany TO erect sound
financial structure over what now
appears to be a great gaping, bottom
less chasm filled with nothing but
paper money shovelled out by the
billions at the Reichsbank.
Cryptic statements of the Imperial
Bank Of Germany which from week to
week set forth enormous increases in
the quantity of shinplasters. until now
the total reaches nearly $1,000, 900, 900
marks, or almost double the paper
money at this time last year. and COW
cred by q microscopic gold reserve OF
less than per cent, give an alto
gether erroneous impression, according
to the reports received here.
Tangible confirmation has been OBJ
tanned for the first time that the total OF
the Germany note issue contains upward
OF about 10000. 100000 marks In paper
money owned by foreign investors which
have been deposited in German banks.
These marks are being held for long
pull speculation and are represented In
the deposit figures OF the various Ger
man banks. They have been sent to
| Germany, and after being credited to the
| account of the owner turned over to
\ the Reichsbank. In the ordinary course
| these paper notes should have been can
| celled by the Reichsbank and taken off
| the total of paper money in circulation.
because they are no longer In circula-
tion. But the Reichsbank simply has
put them in the vaults and continued to
include them in It's note return.
Another important item in the Ger
man bank statement is the amount of
bills discounted. This item fluctuates
with the utmost disregard for the money
market. fact which the reports re-
ceived here explain as a result of the
foreign operations of German exporters.
who have built up huge deposits abroad
against exports and have been aided In
this operation by freely discountng
their foreign bills with the Reichsbank.
thus obtaining funds TO finance their
business at home.
The amount OF German owned ball
ances abroad cannot be estimated. but
il is believed to run into billions OF
marks.
Both the extension Of the note Issue
by keeping large quantities OF money in
the Reichsbank and recording II as "in
circula tion" and the maintenance OF
heavy balances abroad help 10 depress
the mark and make Germany appear
worse off financially than she really Is.