New-York tribune., 1922-06-02
Bankruptcy to
Stabilize Mark
Is Considered
German Leaders Advocate
Proposal as Only Practical
Way TO Place Currency
system OH Normal Basis
Exchange Rate to Govern
Program Is TO Fix a Date
on Which to Buy In All
Outstanding Paper Money
By Carter Field

WASHINGTON, June IA bank
ruptey proceeding. so FAR as paper
money is concerned. Is being seriously
considered by some Of the German
leaders. IL vas learned here to-day.
This is regarded by these leaders as
the next natural step following the
successful conclusion Of the loan, which
has for the time being postponed
crisis on reparations
The idea being urged with regard 70
paper marks Is that the government
shall acknowledge the hopeiessnoss Of
ever getting back 90 normal exchange
conditions so long as this food OF
paper is outstanding. Combined with
the rcparations, the foreign loans. the
budget for home expenses and interest
on debts. il is asserted that redemp-
tion Of the paper marks a. anything
like the old rate OF exchange is simply
iinpc ssiblc.
On given day. according 10 the
plan now advocated. the German gov
eminent should announce that 10 Is
ready 20 redeem ali tho paper marks
az the then existing gold or exchange
value. or perhaps az some slightly
higher value 20 be decided upon. While
no ratio has been sugge estcd by any
Official. the point can be illustrated by
taking the value Of the marks AZ 200 20
the dOllar-it has been much lower
instead Of approximately four 20 the
dollar. which was the pre-war exchange
value Of the German mark.
Reparstion Not Affected
Leaders who are discussing this plan
say that il would not affect the value
OF the reparations payments in the
slightest degree. as these are all spe-
cihcally mentioned as gold marks
After that date all paper marks
would be regarded by the German gov
ernment merely as promises 20 pay
az Of the date set. and At the then eX-
change value. Germany, meantime,
would proceed on new currency basis,
either with the gold mark or some
other unit of money which might be
selected.
The contention Of those advocating
the plan is that Germanys greatest
liability. with tho exception Of the
reparations payments, is the enormous
amount OF paper marks held IN other
countries. Most of these, II IS as
serted, were bought for speculative
purposes, and 81 figures far belo" the
normal exchange rates.
II is not generally realized HON
great this amount Of paper marks pc
ing held by foreign investors IS the
officials considering the question as
sert. They declare that II is well IN
excess Of 100000. 100000 marks.
40 81 q O.
this would amount 10 about S39,OOV,-
600 .OOOO. In short. the German gov
ernment. as the result-of the actipty
Of its money printing presses, owes 70
foreign investors IN German paper
marks sum m excess Of what ONE
eYrerts consider 10 be the total amount
which Germany can pay in reparations
over long period Of years.
Germany on Equal Basis
There is. in addition, some PSI 1,OOO,-
900 900 OF German paper marks IN CIR
culation inside Germany herself Ad-
vocates Of the plan propose that these
marks be called in on the same basis,
without discrimination. The Germans
saw that this would actually work a
greater hardship on their own people
than on investors in other countries.
especially as practically all purchasers
in foreign countries acquired the pa
per marks they are holding as spec
uiation.
They further point out that as a
matter Of fact. II the German gov
ernment adopts their plan the foreign
investors will be a little better Off.
actually. than they are AZ present, on
the theory that under the new plan
they would get something, whereas II
Germany drifts along without correct
ing her currency situation the initiation
cannot but increase, with the ultimate
result that the paper marks Will he
worth exactly what they will bring as
Yopar