The New York herald., 1921-12-12
GERMANY TO DEMAND
INTERNATIONAL LOAN
Plans Giving Guarantees
and Asking Credit Before
Next Payment.
TO STABILIZE VALUES
How Foreign Investors
Loan Billions to Germany
Without Interest.
BY BUYING PAPER MARKS
BY BUYING PAPER MARKS
Price Variations Equivalent
to Loan and Cost of Unem-
ployment Abroad.

Special Gable to TIE New YopK HERALD.
Copyright, 1921, by THE NEW York HERALD
New York Herald Bureau,
Berlin, Dec. IL.
The German Government expects to
set its finances in order and to force
through radical cures for the deficits
in the railways and post office admin
istrations, at the same time enacting
some kind of legislation by which
guarantees for an international loan
may be given. This done, it will
openly and officially demand credit
before the next reparation payment is
due on January Is. Such, at least, is
the programme which Chancellor
Wirth set before himself, it is believed
in German business circles, and his
sion in London is to sound the British
financiers as to loans bear out this
assumption.
Word has gone out from those who
sibilities Of this plan il realized are
great and If the Reichstag does not
play politics too freely with the Gov
ernment's proposals, the long predicted
international loan may yet be placed
Balancing the budget. however, is the
major task confronting the Reichstag
An announcement that the amount
of paper money in circulation in Ger
I. tIA 90, 4.
of 1o1, 100000. 900 marks and the total
amount of paper outstanding is 10S,-
000,000,000, has made the urgency Of a
solution of the problem felt all the more
keenly.
1t is finally admitted now that a pri-
vate industrial loan to be raised by
German bankers and industrialists is out
of the question. The new loan commits
sion which Chancellor Wirth has named
has official standing. and the Chancellor
serves on it as chairman.
Extreme dissatisfaction ia expressed
in Berlin over the dilatory way loan
negotiations have been handled hitherto
and the inconclusive manner in which
the Government sent out feelers to
don.
Price Inequalities Must Balance.
A leading German economist points
out as an example of the curious
phenomena of the German financial
anarchy that standard American brands
of Jordan almonds are for sale in Ger
man shops at 10 cents a pound and
popular American cigarettes, sold in the
United States at 10 for 80 cents, are to
be purchased here at IL cents package
This, he says, brings home the lesson
that something never can be had for
nothing, and that price inequalities al
ways balance themselves.
Jordan almonds and Turkish cigar
cites are but two typical items in the
infinite network of disarranged values,
he declares, and even though foreig.
purchasers have been emptying German
shelves in the last few weeks at ao-
surdly cheap prices their own country
men have been helping make up the diff
ference between the real and the cost
price of the goods purchased by them.
Seventy billions of German paper
marks are in the possession of foreign
investors, according to this economist.
Although it is impossible TO state what
were the quotations on these marks
when they were bought, il Is likely that
the average rate was forty marks to the
dollar. and therefore these holdings of
German paper marks represent the sum
of 81, ,750, 100000 In other words, pri-
vate individuals in all parts Of the world
made loans to Germany without interest
and without security. and when the
mark collapsed and the dollar stood at
300 marks these investors sacrificed six
seventh of their capital, or s1,500, 000,-
900. When last week the dollar fell to
zoo marks they regained something in
dollars, but still they are s1,400, 100000
behind.
So when foreigners swamped German
shops and German factories with orders
and made huge profits. at least a part Of
the money so obtained was taken out of
the pockets OF their own oountrymen.
While Il IS true that the German
workinginaai labors three times as fong
for every imported article he buys, It
also IL true that by this enormous loan
b. private individuals Germany managed
60 avoid an even worse situation than the