The Washington herald., 1921-12-22

THE strange financial situation in Germany
i which results in an impoverished government
while private industries Hourishing. in gigantic
deficits in the national budget while stock compa-
mics show huge profits, is emphasized by the condi-
ton of the revolving credit which was granted to
Germany by Holland. This credit arranged,
after the importance and necessity to revive the
economic life of Germany has been stressed, for the
purpose of grain import and the provision of raw
materials for manufacture. 1t is known as re
volving credit because it is intended chain of
credits to be constantly renewed within a period
of ten years A newly created organization was
formed, called the "trust administration for the
German Dutch financial agreement" which is ex-
pected to see that the credit is handled in the in
terest of both debtor and creditor Yet, in spite of
the campaign to arrange this credit and the consid
cradle sacrifice involved in Hollands advancing
money, it seems that German industry is failing to
make of the arrangement
This is discussed in the November issue of Die
Bank in an article said to have been written by its
editor. DR.. Alfred Lansburgh. Concerning this
100000, ooo-forin credit which became available in
March, 1921, Die Bank says:
"Since March last the credit agreement has
been in force. and the functions of the trust ad-
ministration and the German coal deliveries have
been going on according to program. There is,
however, small drawback: The German indus
tries will have nothing to do with the credit. In
stead Of taking advantage OF the opportunity of
obtaining materials credit, the German in
dustries have obtained raw materials from other
countries and when they could not obtain these
credits have preferred to the revolving credit the
very favorable payment conditions offered in private
quarters. The German government has not even
used to the full that part OF the 6oooo,ooo forms
reserved for the grain imports, because the German
banks have advanced it the requisite foreign bills
on easier terms. In consequence, the trust admin
istration has issued invitation after another to
the industries to take advantage OF the opportunity
offered by the revolving credit Since advertise
ments in the press and visits to fairs have failed.
popularize the revolving credit the conditions have
been relaxed il is to be granted not only to firms
which manufacture the materials but also to
those which export semmanufactures and not only
for three or six months but for the whole year,
with possibility of extension In order that small
firms may make OF the credit, an agreement has
been concluded with the Berlin Foreign Trade Con-
troll Association which is to enable the firms in
question to obtain the necessary guarantee of a
bank. In spite of all these efforts, however, the
credit business makes no progress; OF the 100000
900 forms raw materials credit which to be
available barely 100000 forms have been claimed
1t has been realized that the credit does
spond to any economic requirement, and that the
idea that Germany would not find in foreign coun-
tries persons willing to grant her materials
credits, and customers for her manufactures, was
based on error. AS matter Of fact, the German
economic system maintain itself without any
official organization and any practical might
we'll have predicted the failure of the revolving
credit"