The New York herald., 1922-11-27
GLOOM SETTLING
ON BERLIN BOERSE
Need for Increased Capital
Seen While Day of Unem-
ployment Nears.

Special Gable 60 THE Nrg 1osx HEh.Lp.
Copyright, 1899, bv THE NEW YORK HsRsLo.
New York Herald Bureau.
Berlin. Nov. 26. !
The transltory optimism which pre-
vailed in Germany while the prospects
OF new Cabinet were still rosy faded
toward the week end to gloomy depres-
sion deeper than before. Politically the
depression Is the result OF the admitted
weakness OF the position or the Cuno
Cabinet and the scandal which caused
the resignation OF Hermann Mueller the
Food Minister tho Socialists having
rcharged that he consplred three years
ago with the French FOR separation
OF the Rhineland from Germany
Another political factor is the reported
disa greement between ]. p. Morgan and
Premier Poincare as TO the method of
dealing with Germany. In this, as IN
the Cabinet situation. 10 is merely the
uncertainty with which the whole situa-
ton Is shrouded that has wrecked the
hopes that something constructive was
about to be done.
Economically the depression IS due
to the ever growing need for Increased
capital in practically all trades. Bor
rowers are holding tightly to their for
eign currency, for which they threw
IS. COZ. .oCo,00 marks IN commercial paper
into the banks as security last week
alone.
Interest st zoo Per Cent.
So anxious were the borrowers to Sc
cure the needed capital that interest
and discount rates SCARED tremendously
wllilo the depreciation in the value Of
tho securities IN paper marks often
makes the temporary capital cost the
borrower so per cent per year.
The heavy demand FOR working caps-
tai was followed by an unprecedented
Increase In tho Retchsbank's weekly
output Of new money. which reached
total OF 6S. 100 100000 marks. or double the
weekly circulation on October l. The
fact that the fall In the mark three
weeks ago Is Just now reaching the
petail trade which must replace It's
stock sold at the old figures is respon-
siole for large part of the demand for
working capital.
Meanwhile Germany IL drawing nearer
to the dreaded day. long expected. when
unemployment begins. Prices continue
to rise generally and in cases where the
world level is exceeded orders are fatty
Cancelled. number OF industries.
notably textiles. already have adopted
part time schedules The steel situation
continues bad. prices being too high for
foreign competition Iron Is down
slightly. but not enough to stimulate
production to the point Of bringing abou.
demand for additional labor. Do
mcstic orders have kept UP surprisingly.
Railroad Rates Boosted.
The Industrial leaders are bending
every effort to obtain reversal OF the
Railway Ministry's decision to raise
freight rates on live stock $50 per cent.
on December /. The Ministry. which
also is raising passenger rates 100 per
cent. is obdurate. saying that the drastie
increases have not yet caught up with
the prices Of equipment
One hopeful report OF the week is the
increase In coal production. Half
million more tons were produced IN the
Ruhr district In October than In Sep
tember owing to the decision of tho
miners to work ten hours two days e
week and seven hours on four days.
The deliveries of grain under the
Government compulsion act have been
disappointing. only 100000 tons having
been received, while $4,000 are needed
to operate the bread control. A bad
season and late harvest arc held re-
sponsible for this.
On the Boersc the dollar had q bad
week. opening at 1000 Monday and
closing Saturday at 1923 with mini
mum OF 6.17o In between. The dollar
decreased 81 per cent while Industrial
securities Slid back Is. Federal loan
bonds gained per cent.