The Birmingham age-herald., 1921-02-27
AUSTRO-HUN BANK; ONCE SUPREME, IS
 WRECKED BY WAR
Ancient Vienna Money House, With Kings and Popes as Patrons, Pathetic Victim
 of Romance of Finances
By Associated Press

Vienna, February 2e-The romance oi | finance-and the pathos--is disclosed in
 the liquidation of the once proud and powerful Austro-Hungarian bank, one of
 the oldest banks in the world, and sonn of the richest with billions of gold in it's
 vaults and billions of notes in circulation,
 all now scattred by the wreclSage of war and political upheaval. | For more than six months the allie l liquidation commission has been at ,worl;
 on the affairs of the bank in an effort
 to wind it up. in fulfllment of the treaty
 of St. Germain. Not only is liquidation l still unaccomplished, but no one is will 1 ing to forecast when it will be-
 1 The curious situation in which the pro- | ceedings have become involved resulted 1 in the resignation recently of Henry Whitman of Boston. the so-called ''un- official American advisor" who in a published interview expressed his dissat- 1 isfaction with the Paris policy toward | liquidation, stating that it's dilatory tac- cics seemed to make impossible satisfac- tory discharge of his duties. MT. Whitman said that the application of simple busi- ness principles to the discharge of the provisions of the treaty would have made the problem a comparatively simple one. but that apparently certain powers did not sympathize with the American view that the war was over
 ONCE SUPREME
 The Investigation of the liquidators during these months, however have re- vealed how the old imperialism has cen-
 tered in this great institution.
 The Austro-Hungarian bank was the
 bank of issue for the former dual em- pire and after the retirement of the ma tiona1' paper currency in the early nine ties its notes became the sole currency of the empire. While on their face they were payable in gold that obligation was suspended by the government so that these notes became merely fired eema ble paper. Coupled with this suspension was the obligation, however. to maintain the value of the notes on parity with gold in all matters of foreign exchange
 By clever financing and through the aid of government assets the bank not only complied with this but for some years before the war it's notes actually commanded a premium over gold in Eu- rcpean financial eenters. It also ac- cumulated a stock of gold only exceeded in amount by France and Russia.
 In the early months of 1914 there were l, 600, ,Oto 600 crowns of gold in it's vaults and it's note circulation was about 2.000,- eco, 900. It was then doing a strictly com mercial business, it's only obligation be- ing an ancient one to the government for the note issuing privilege. In the spring and summer of that fateful year it's state ment showed a Slignt increase Tn the BOlO stock while in July of 1914 it's note issue was almost at the lowest point, it's items of loans and discounts being only about 1,G0o 0ocNnN crowns
 JOLT ARRIVED
 A comparison of this statement with that of the following week showed that something had happened in the world and that was the assassination of Arch- duke Ferdinand That statement indi- et. the possibilities. The bank had lost 170- o0oc09 crowns of it's gold stock and the loans had increased by a billion with a corresponding increase of note issue. Sub- sequently events are as clearly indicated in the weekly statements. as during the month of August with the declaration of war the loan account had increased by another billion crowns and by the end of the year the gold stock had lost 3so - 600 crowns. the note issue had in creaed by 5000, ,0o0 and the loans over 9 GOO COG. 600.
 The demands of the government stead- fly increased so that by the end of 1915 1 the bank had lost another 100000 0Jc crowns: a year later the gold reserve was reduced to 35on980oo, beyond which they apparently dit not dare go Aus tria-Hungary's war financing apart from the bank, was done by popular loans, but the desperation of its situation was shown in the last five months of the war when it called upon the bank for loans of .50o, ,0o0 every three weeks.
 When the monarchy fell the note issue had increased to more than %, 900 000. GOO crowns. But this was not the worst. The war loans were floated on the govern nlent's promise that the banks would at all times lend 75 per cent of the face value of the bonds. With the armistice came a, rush on the banks for these loans. Between October 2S and January II loans of the Austro- Hungarian banks had in increased by 3,5oo 0oO,ooo crowns. Within six months this was further in- creased by another 2.590 Oc0, ,O0a
 SEVERAL BENEFIT Some of the loan items are interesting One bank with capital of 5000, GO crowns