Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1921-02-28

closed in the liquidation of the
once proud and powerful Austro-
Hungarian bank, one of the Oldest
banks in the world, and one of the
richest, with billions of gold in its
vaults and billions of notes in cir
culation, all now scattered by the
wreckage of war and political up
heaval,
For more than six months the
allied liquidation commission mas
been at work on the affairs of the
bank in an effort to wind it up IN
fulfillment of the treaty of st. Ger
main. Not only is liquidation still
unaccomplished but no one is will
ing to forecast when it will be.
The curious situation in which
the proceedings have become in
yolyed resulted in the resignation
recently of Henry Whitman, OF
Boston, the so-called unofficial
American advisor" who, in pub
lished interview. expressed his dis
satisfaction with the Paris policy
toward liquidation, stating that its
dilatory tactics seemed to make i'm
possible a satisfactory discharge OF
his duties. Mr.. Whitman said that
the application of simple business
principles to the discharge of the
provisions of the treaty would have
made the problem comparatively
simple one, but that apparently
certain powers did not sympathize
with the American view that the
war was over.
The investigation of the liquida-
tors during these months, however,
have revealed how the old imperl-
alism has centered in this great
institution. .m
Notes Became Sole Currency.
The Austro- Hungarian bank was
the bank of issue for the former
dual empire and after the retire
ment Of the national paper cur
rency in the early nineties its notes
became the sole currency of the
empire. While on their face they
were payable in gold, that obliga-
ton was suspended by the govern
ment so that these notes became
merely irredeemable paper. Cou'
pied with this suspension was the
obligation, however, to MAINTAIN
the value of the notes on a parity
with gold in all matters of foreign
exchange.
BY clever financing and through
the aid of government assets th'
bank not only complied with thi'
but for some years before the wal
its notes actually commanded {
premium over gold in European
financial centers. 1t also accumu
lated stock of gold only exceeded
in amount by France and Russia.
In the early months of 1914 ther,
were 1000, 000,0 900 crowns of golf
in It's vaults and its note circula
ton was about 100000, 200. l
was then doing strictly CONNER
cial business, its only obligation
being an ancient one to the govern
ment for the note issuing privilege
In the spring and summer of tina
fateful year it's statement showed
slight increase in the gold stocl
while in July of 1914 its note issu
was almost at the lowest point, 1t
items of loans and discounts be
ing only about 1,000,0OO,OO
crowns.
Something Happened.
A comparison of this statemen
with that of the following wee.
showed that something had hap
pened in the world and that wa
the assassination of Archduke Fer
dinand. That statement indicate
how clearly European finance say
the possibilities. The bank ha
lost 100000 900 crowns of its gol
stock and the loans had increase
by a billion with correspondent
increase of note issue. Subsequer
events are as clearly indicated l
the weekly statements, as durln
the month of August with the de
claration of war the loan accour
had increased by another billio
crowns and by the end of the yea
the gold stock had lost 800 100000
~ crowns, the note issue had II
creased by 3,000,000,000 and tn
loans over 1000, 100000.
The demands of the governmer
steadily increased SO that by tn
end of 1915 the bank had lost ar
other 100000 900 crowns; yea
later the gold reserve was reduce
to $4,000, 600, beyond which al
parently they did not dare gt
Austria Hungary war fmancin
apart from the bank. was done b
popular loans, but the desperatio
of its situation was shown IN Tn
last five months of the war whe
it called upon the bank for lean
of !, 500, 600, 600 every three week
When the Monarchy Fell.
When the monarchy fell tn
note issue had increased to NOR
than 10000, 100000 crowns b.
this was not the worst. The wa
loans were floated on the govern
ment's promise that the bank
would at all times lend 7 per cer
of the face value of the bond
With the armistice came rush Q
the banks for these loans. Betwee
October % and January ! loar
of the Austro-Hungarian bank ma
Increased by $500, 100000 crown
Within six months this was fui
ther increased by another 2,5OO
100000.
Some of the loan items are II
teresting. One bank with a cap
tai of 5,000,00 crowns was loane
800, 000,0 900, an insurance compan
capitalized at 100000 was loane
4, 500, 100000 while the privat
purse of the vatican was handle
,3,000,0D0. The security for theS
loans were bonds of the monarch
already fallen and which none {
the succession states have bee
willing to father. ..,
The peace conference failed
solve the currency question for II
states resulting from the dismen
aberment of the empire or as on
expert expressed it. found it ne
essary to omit to solve IL" II
plan of the treaty was to comp
each state to withdraw from CT
culation the notes in it's terrltoi
and substitute therefor its own Gu
rency. The bank was to he put
fiauidation and its assets divide
among the succession states in pr
portion to the notes issued befo
the fall OF the monarchy al
withdrawn by them from circul
ton.
Couldn't Separate Notes.