Connecticut western news., 1922-08-17
GERMAN COLLAPSE AND
 AMERICAN BUSINESS
Roger w. Babson Discusses the International and Finan-
 cial Situation

The German question was dis cussed today by Roger w. Babson, statistician, who has been disentang- ling the international and financial situation.
 Germany has failed to meet her obligation on the indemnity pay ments," says Mr. Babson, "and like any other concern is judged bank rupt. We face the same situation that we find when a business can not pay it's debts. We either have re- organization and try to get it back and judge it bankrupt and sell its assets and put it out of business.
 "The world is now having a creditors meeting to decide what is to be done with Germany. Up to the present time France, the largest creditor, has been taking the pound of flesh. It is only within the past few days that she has offered any other proposition. Now, however, France sees that if she will let Ger many off that England will Jet France off. It is understood that a French Ambassador is dealing with the United States Government at this time, in the hope that the rcpub- lie may be released from some of the debts she owes to us. These later developments are favorable indeed, and strongly suggest that a friendly | reorganization of German finance is possible.
 "If France on the other hand were to march an army to Berlin, and to collect the pound of flesh by force, it is quite possible that this might align Russia, Italy and even possibly England with Germany and bring about another war. This, of course, would be an undesirable situation from every point of view. Such action would undoubtedly cause q panic in our stock market, and would seriously embarrass our big banks. It would upset business gen erally. We would not even experi- ence the business boom that we had at the beginning of the last European war. The new gases and chemical weapons of warfare developed since 1918 can be made just as we'll in Europe as over here.
 "If, however, Germany has a friendly reorganization of her finance it would mean much and boom American business. Such a reorganization would clear the air and overcome the fear of repudiation which keeps all our foreign transac- tions in a muddle. It would do away with the uncertainty of the situation and if arranged to the mutual satis- faction of all parties concerned it would give the whole world the confidence it needs at this particular time. It would strengthen business everywhere. The greatest part of the benefit would be felt in America. I certainly hope that this will be the outcome.
 ''In the meantime" concluded MT. Babson, i've must remember one thing more, there is a distinct differ ence between Germany's government tai finances and the finances of Ger man firms and corporations. The credit of Germany's government is almost nil because of the tons of paper marks which it is obligated to redeem. The banks are also in a rather uncertain position because ktheir cash assets are of very uncer- tain value. The private firms of Germany, however, hold real prop erty, factories, machinery, land equipment and merchandise. Most 1 of them are in a sound condition 1 because these things are of actual and permanent value. The reorgani- zation of Germany's finance would upset the German government s financial bureau and might call for considerable readjustment in Ger many's banking circles. It need have little affect on the real credit of private firms"
 General business is maintaining it's recent improvement in'spite of un- | favorable sentiment created by coal and rail strikes. The index of the Babsonchart shows that business is 1 but 9ft below normal. No change l since last week