Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-09-24
German Mark Steadlness

The arrangement under which Ger
man gold and securities are to be de-
posted with the Bank of England in
lieu of cash as guarantee for the SIX
months treasury notes issued to Bel
GUM has had a ~steadying effect upon
the German mark, despite the continued
Outpour of new paper currency. and
naturally so. With Germcn printing
presses turning out paper marks at the
rate of over $500, DOC, 900 a day, no
respite in the indemnity payments can
avail for long to prevent further de-
probation.
The only way German currency can
be established is for the note increase
to be stopped, and this can only hap
pen when a halt is called upon the eX-
travagant borrowing now going on by
the German government n by com
mercial interests, which, owing 10 the
great rise in prices. require constantly
increasing credits.
German Discount Rate Rises
The re~ichsbank has sought to meet
the emergency by still another advance
In its rate of discount. This rate,
which. up to the end of July, stood at
5 per cent, now stands at 8. The prac-
teal significance Of this has gone up,
TOO. But whether this raising of the
IilNAdl uloNouht tLd St " lhC hlEhtCb
on record viii have the desired effect
of checking the expansion in loan &C
counts is altogether doubtful.
German business men who saw their
living costs go up over 40 per cent in
q single month during August are not
likely to balk at paying 8 per cent for
their money when they used to pay 5.
The main trouble has been the necessity
of German government to raise funds
for the purchase of foreign currency
with which to meet installments of the
indemnity. In the last 10 days of Au-
gust alone the treasury bills presented
for discount at the reichsbank amount
ed to the sum of Is, 900, 900 marks.
If. as the result of the postponement
of further cash payments, a stop Is put
to this government borrowing the Ger
man financial situation might take a
turn for the better. The next week
or so will tell the story.
American Exports Fall Off
Our total merchandise exports for
August were only $500, 0O0, 900, the
smallest of any month this year with
the exception of January and Febru-
airy and S65,000,000 less than those of
August a year ago, when the domestic
trade collapse was at its worst. These
figures have shown that the r~ecovery
of the last II months in home industry
has brought no response in the foreign
provement in this quarter there can
be nothing in the nature Of a trade
boom.
American industry can get along
fairly well relying upon the domestic
market alone but there has never beer
an era of great prosperity in this
country without an active and profit,
able foreign trade.
No Money Strain
The advance in call money to siz
per cent and the slight hardening Of
quotations for time loans are a reflex
of the seasonal demands for money il
the crop districts, but they do not
suggest anything resembling a strain
From the banking viewpoint a six pei
cent money rate through the autumn
months ia altogether healthy and de.
sirable. At any TIM interior bank with.
drawals press too hard. extra credit
could be Immediately obtained through
assistance of the rediscount privilege
at the federal reserve banks.
Under present day conditions tht
real criterion of money market condi
tons il not the individual bank loar
accounts or the individual surplus re,
serves but the movement of fedora
reserve holdings. The increase in thi,
item from the very low of the yea
is only S51 900, 900, most of which oc
Cured within the last week. Presen.
total of bills discounted by the fed
eral reserve bank at the instance o.
member banks ia S423. 900 900 a,
against over $3,000,000,0 900 in the earl!
part of 1920.
These comparisons bear witness tt
how very slight the pressure of agri