The New York herald., 1922-07-17
BERLIN PRICES RISE
AS THE MARK FALLS
Bank Credits Vanishing and
Manufacturers Fear Ruin
if Mark Starts Up.

Special Cable TO THE New York HnRALp
Copyright, 1899. oy THE New YoEK HnzALp.
New York Herald Bureau.
Berlin. July 16.
Some competent observers believe
Germany similar to that in Austria.
w. F.. Upson. commercial attache at
Vienna, who is visiting Berlin, said the
furry which followed here Immediately
upon the drop in the mark was similar
to the periodic panics which seize
Vienna. There are symptoms of imme-
date rise in prices and shops close for
nm immediate inventory when the crown
drops. AS a result an unfayorable turn
In the exchange affects prices the same
day in Vienna.
5eriin food prices during ts:S recen.
crisis rose 25 per cent. in three days
and in the subse 1uent week 10 per cent.
more. Other prices, such as gasoline.
for example, jumped zoo per cent. Other
imported goods show tho same tendency
to respond Immediately to any varia-
tion in the maik. Characteristic OF this
drop in the mark is the moderate domes-
tic buying Only foreigners invested
heavily. The German public does not
have its forme- buying power and the
shopkeepers knew that the rising prices
would drive away their German Glen
tele.
In general German industry is re-
ducing production. The principal reason
for this Is the difficulty of getting bank
credits. Three months ago German
banks began cutting down the credits
they advanced to old enterprises and
to refuse money to new ones. To-day
the banks are Withdrawing part of the
support they have given to home in
custries ana are refusing 70 f,.st Ecv
stock issues. The paper money short
age added to the difficulties caused by
the present policy Of the banks.
Rise in Mark Feared.
Until the prices of German COM
modities reach a world market level
German factories cannot manufacture
without currency imitation. Hugo SHINES
and other manufacturers admit that
rise in the mark would paralyze in
dustry.
The textile industry offers a typical
example of present conditions. The
price Of cotton in Bremen rose parallel
with the mark. The price now is about
30 per cent. higher than on June /. But
the manufacturers, despite the increase,
bought heavily, expecting the mark to
collapse. The retailers also flooded the
wholesalers with orders. The cotton in
dustry is booked solid until the end OF
October with the deliveries extending
into March. Only momentary failure
to get sufficient cotton prevented the
manufacturers from taking on more
orders. But this industry would become
a highly speculative and disastrous one
were the mark to take any other course
than slow depreciation in value.
Textile manufacturers. especially
manufacturers Of wooden goods, tell THE
NEw YORK HERALD correspondent that
they have begun steady reduction in
their output this year. Several old
firms have failed and others-dc not feel
that they can carry on under the heavy
speculative chances due to the mark
fluctuations. The retailers have, now
organized cartel and will negotiate
with the manufacturers as unit. Deals
are closed when the raw materials are
purchased and a margin of 80 per cent.
is left for fluctuations in the mark and
manufacturing costs.
HOardfnE of Goods Begun.
Hoardng Of goods. which is now
common practice. has upset all accurate
calculations OF the public's needs.
Wholesalers withhold their goods when
the mark drops and even individuals are
Home factories are now paying their
employees quarter of a year in ad
vance on the condition that they buy
stocks Of household supplies while they
are still within reach.
A threatened coal strike in the Ruhr
district was avoided through compro-
misses In which the employers agreed not
to ask for overtime work and granted
higher wages 1t is estimated that Ger
many will have only $4,000. 900 tons Of
coal annually for its own needs owing
TO the loss OF Upper Silesia and reduc-
tion in its own production.
The Allies have secured the financial
and export control over Germany which
they desired. The agreements made with
Berlin last week. The German Govern
ment must now supply the Allies with
statistics showing the country's resources
when desired. Without controlling Ger
nanys exports and imports, the Allies
can examine the detailed reports and
can recommend notifications. The most
important provision is the one which
gives the Allies the right to compel the
Germans to open their private books to
them II they suspect false export decla-
rations. The Allies are not limited in
their control. because they have direct
control over German commerce. industry
and customs. while the Government
merely exerts official supervision.
The principal objection of the Ger
mans to the extended control of the Al
lies is that Germany's business secrets
will be opened to the eyes OF Germany's
greatest rivals.