New-York tribune., 1921-09-12
Dark Outlook
For CerHnany7s
Financial Year
Drop in Marks Reflects Sit
uation, Which Has Taken
Turn for Worse; Large
Deficit Believed Certain
Expenditures Still Grow
Government Employees Get
Increase; Rail Losses Con-
tinue Despite Rate Raise
Special Cable to The Tribune

Copyright 1921. New York Tribune Inc.
BERLIN, Sept. 11.-As predicted in
previous dispatches, the mark showed
progressive decline last week, and in
some financial circles it is believed
that the decline will continue until the
dollar will purchase $50 to 200 marks.
The drop in exchange values was
made in the face of an otherwise salts
factory industrial situation, and was
attributed almost entirely to recent
renarations payments, which, in addi-
tion to involving Germany in new obli-
cations at home and abroad princi-
pally in Holland. to be met in three
and six months, have also served to de-
plete the gold reserve to no inconsid-
cradle extent.
The decline in the mark is simply a
reflex Of Germany's financial situation,
which has taken distinct turn for the
worse in the last few weeks.
More than six weeks have passed
since the announcement of Chancellor
Wirth's plan of financial reform, by
which he intended to raise 10000, ,000,-
900 to G5,000,000, 900 marks, approx
mately $1,000.00O, 900, and mark time
pending promul ga tion of the program.
A further decline in the mark, how
ever, has created q new annual deficit
of 25,000 100000 marks. The recent
agreement between the government and
the union of government employees,
which provided for salary increases
adds another 10000 900, 900 to this
deficit. The national railway admins
tration will continue to show q deficit
of at least 9,0O0,0 900 marks in spite
of recent increases in rates of from
35 to 40 per cent Another similar in
crease is already under consideration,
and this is bound to have serious ef-
feet on the already constantly rising
cost of living
Although reports recently published
show the most satisfactory results so
far as collection is concerned, the total
receipts continue to fall far behind
expenditures.
The next reparations payment of a
1000, 100000 gold marks is due March l.,
1922, so that Germany will have a
breathing spell of six months. In
spite OF the governments determina-
tion to make the budget balance and
comply with the provisions of the YER
sailes Treaty, there is now arising q
distinct skepticism within the coalition
parties regarding the ability of Ger
many to do so.
Although not sharing the pessimis-
tic view of recent writings, govern
ment observers insist that the necessity
of revision of the reparations pro-
visions of the Versailles Treaty will be-
come imperative in the near future.
This revision, government experts
declare, must be accom- oonied by new
and radical financial changes, not so
much as far as taxes and tariffs are
concerned as in regard to nationaliza-
tion Of the whole line of large indus
tries banks, insurance companies; in
short, a complete reorganization of the
German industrial fabric in the direc-
tion Of increased state control.
Increased government intervention
in industry is believed imperative in
order not only to prevent an economic
debacle, but to forestall serious indus
trial conflicts between capital and
labor, which are foreseen as probable
in the coming winter.