The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-06-01
GERMANY STARTS
TOPAY WAR BILL
Federal Bank Gets $35, 49,
900 for Reparations Accounts
Of France and England.
CREDITS HERE ARE USED
Reichsbank Had Piled Up
Funds in American Banks
in Last Few Months.

The Federal Reserve Bank OF New
York held last night four checks for
total of $35,733. 900. the first payment
in America of the German Governments
reparations for war damage. The funds
were credited to the accounts Of the
banks of England and France. for which
the Reserve Bank has acted as fiscal
agent during the last five years. The
money came from balances which the
Reichsl,ank. the central bank of the
German Republic. had accumulated here
during the last few months, together
with the proceeds of transfers from Ber-
lin through the foreign exchange market
last week 1t was believed yesterday in
local banking circles that stipulated
payments also had been completed in
London and Paris coincident with the
transaction In New York. and as an
evidence OF GOOD faith on the part of
the German Government the news made
considerable impression on banking SEN
timent.
The payment was handled in New York
by the Equitable Trust Company. whose
check drawn against funds on deposit
with itself amounted to about $4,000
900, and by Hallgartern & Co., Speyer &
Co. and the Guaranty Trust Company.
acted as correspondents of the Reichs-
bank.
The full sum in American money. It
was learned was the equivalent of 49,
100000 gold marks, or 1900. 900 900
paper marks. In baking quarters famil-
lar with reparation payments 1t was said
that the details Of additional deposits in
the Reserve Bank were not known,
although II was doubted whether
$50, 1000. 900, as reported in dispatches
from Berlin, would be paid over soon.
AS news from abroad has told of de-
livery to the Preparations Commission of
notes covering 100000 900, due as the
initial instalment Of reparations claims.
it is understood that part OF the pay
ments will not be completed before the
notes fall due in ninety days.
The Reichsbank did not exhaust it's
credits in this country through yester
days payment. The belief prevails
among bankers that the German Gov
eminent has recourse to a substantial
amount Of private credits. But the sug-
gestion was made in facts surrounding
the reparatfons payment made yester-
day that, through the Reichsbank. the
German authorities plan to remit funds
direct from European centres In meet
ing substantial part Of the notes in
the hands of the Preparations Commits
sion. Last weeks transfer OF money
was estimated at between s15.00o,0 600
and S20.000,000, derived through sales
of sterling and franc exchange In Lon
don. Paris and New York and the con-
version of the proceeds into dollars.
This large transaction in exchanges
throws some light on the violent fiuctu-
ations which occurred last week In ex-
change rates. From SS.963s on Tues
day. the quotation of the pound sterling
was forced down to S3.S77s on Friday. a
decline of moro than cents. and in
the same time the value Of the French
franc in exchange was carried from
about S.76 cents to S.27la cents On
Monday, when the markets were closed
here on account of the holiday. sterling
receded so far In London that a drop
OF more than cents occurred yester-
day morning In initial trading in New
York to even up the two markets, but
the price advanced Immediately and at
.S3.88A, the final quotation. the rate was
only three-quarters of cent to the
pound lower than It was on Saturday.
Francs also recovered.