Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-10-05
GERMANY NEAR
BANKRUPTCY is
BELIEF IN u. S.
Unable to Meet November
Preparations, Powers Grant
Extension.
U. S. AFFAIRS MENDING
Special to Indiana Daily Times
and Philadelphia Public Ledger.


special to Indiana Daily Times
and Philadelphia Public Ledger.
By c. b. EVANS.
CHICAGO, Oct. st was a rarely
wise coterie of financial worthless that
sat in conference for a full ten minutes
in Chicago yesterday discussing perhaps
the most important economic question
now before the world, that is the fate of
''ermany. The interchange was intro
duced by the remark of a patriarch in
the trade in securitses who has made an
excellent record as to reputation and
prosperity. He declared that so low
have the prices of American stocks gone
that under the worst probable circum-
stances the income on the properties
would be such as to yield a fairly. good
income on their values as expressed by
the last equity. the common stock.
Then came the backslap. "Wha Is
Germany going to do to u.s."
Replied the patriarch: 1T Will give
us a shock if it becomes avowedly bank
rupt, but otherwise the effects will be
small The question naturally arose
what would constitute open bankruptcy
beyond what is now known Has not
Germany, been obliged to put up a plea
of inability to meet Preparations require
ments and has not her paper been ex-
tended: Is she not now saying she can
not meet the November installment? The
reasonablcness Of these questions was
conceded.
Then party to the conference who
thinks far out beyond Fights and quar-
ters in the stock market declared that
the test Of the effects of this insolvency
on the rest Of the world is in the amount
of money due from Germany to Otherl
countries in connection with the credits
III T. t. a.
the United States. but Holland, Scandi-
navia, Great Britain, France and the
rest Of them. Nobody knows the amount
Of American claims though we have the
indefinite estimate of $1,000 100000 due
from all foreign countries.
1t is seen that the process Of convert
ing raw material into finished products
by the labor of the industrious and in
telligent Germans is too slow to count
for much and meanwhile the exchange
conditions is growing more and more
frightful. There is at the same time an
. increasing inflow Of merchandise into this
country which tends to reduce prices,
small electrical equipment and enamelled
ware being specially mentioned. This
hurts US a little in the way of delaying
unemployment Of artisans now idle.
All are agreed that present conditions
cannot last long. The internal situation
proves that. Every time anybody has
sold anything in Germany since the armi-
stise he has accepted payment in a
paper money which now is worth very
much less than at the time Of the trans
action and thus he Las become imPOT-
eTished. The position Of a landlord is
particularly striking. He has made
leases running a year or perhaps many
years at a given rate and unless it has
been specified, as in long leases in this
country. that the rental shall be on the
basis Of a certain amount Of gold of
given fineness. he is on the way to the
poorhouse. If on the other hand the
lessee has committed himself TO the
payment of gold or its equivalent he Is
wrecked, for ii takes twenty-five times as
much paper to buy a gold unit as it did
at the par of exchange and there is no
escaping even in internal transactions
the test Of the gold unit.
Moratorium? That in its nature Is
temporary expedient and would hel@
nothing dOmestically. II 1t applied to
obligations abroad. it would be clear
plea Of bankruptcy. Logically, it would
mean the seizure of property and that
might happen on a grand scale If the
Preparations payments were defaulted-
France is not keeping 1,0OOWO men
under arms for nothing.
1t seems certain that Germany is going
to lurch up against US with some degree
of effect or other. 1t is a question then
Of the consequences on our security mar
ket. Few American issues are held IN
Germany and therefore there should be
little of the unloading on Us that has
always in the past resulted from menaclng
political or economic conditions In
Europe.
But the stock investor and the specu-
Iator. mindful that some ugly creature
may emerge from the European museum
of horrors almost any time, is watching
his step. That is a good thing II one
NAV almost impiously say that good may
come to a distant country out or so
grave a calamity as that which has over
taken not only Germany but other parts
Of Europe The American Is right In
king that affairs at home have mended
somewhat and he is justified In taking
fair advantage Of any unusual economic
situation. but here is case where eau
ton has imprinted itself upon the minds
Of American traders.-Copyright, 1871, oy
Public Ledger Company.