The Washington times., 1922-07-08
MONEY--TRADE
Germany's Collapse.
Prepare for Shock.
Spectators to Lose.
Our Loans to Europe.
Nv GEORGE w. HINMAN.


CHICAGO. July S.-Germany tis
near her financial and economic
collapse; her bankruptcy Is at
hand. That is the su bstsnce Of a
report made to the Preparations
Commission on Thursday and out
lined in the newspapers. One cor
respondent adds that Germany q
bankruptcy will shake Europe.
What would the German bank
ruptcy mean to the United States,
to the business of the United States,
to the American investor In foreign
securities?
In the first place 1t would mean
that the United States Government
would lose the $3.50 100000 owing
1t for keeping its troops on the
Rhine for nearly four years after
the close Of the war. This quarter
OF a billion would then be gone to
Join the $25 100000 owing the
Government from Austria. the $l3..
100000 owing the Government from
Armenia, the $15,000.000 owing to
the Government from Greece, the
$1,000. 900 from Hungary, the $751;
900. 900 from Jugo-Slavia, the $685.
10000 from Esthonia, Latavia and
Lithuania, the $l50,000.000 from
Poland. and the S22,000,000 from
Russia-all officials debts from gov
ernment 10 government, and more
than $500, 900. 900 in all.
Big Loss to Americans.
In the second place the bank.
ruptcy OF Germany would mean
probably a loss Of some 5000, ,000. 900
or $500. 900 to Aemricans who
have bought German marks all the
way down from or cents. or
nearly 10000, 900, 900 paper marks
outstanding at this date, London
financial newspapers estimate that
Il, ,000, 100000 have been taken out.
side Of Germany. The amount
seems to be too large to be exact.
but London is well informed and
its estimate cannot be far from
correct. America Is credited with
holding more than half Of these
and to be still buying.
In the third place, Americans
hold many German government and
city bonds. How many. nobody
knows or even guesses.
Here. then. would be a direct loss
OF half billion at least to the people
OF the United States and their Gov
ernmeht. Would 1t shake the coun-
try? 1t would not. The determine.
ton Of the allies to let none of the
German government money come 20
the United States for the payment
OF debts has already been so plain
as to be discounted. They scrape
Germany until the angleworms squal.
but not a cent Of what they get is
allowed to cross the Atlantic: that is
their policy and practice and the
United States supinely assents to
both. So German bankruptcy can do
US no harm in this respect.
Private losses.
As for the private losses Of the
speculators in German marks. these
are largely behind US. Three-fourths
or more Of the money has been long
gone. charged off to profit and loss
a year ago. II the spectators had
the business sense they should have
been born with. In regard 20 the
German bonds, little can be said be-
cause SO little is known. Only these
bonds are mostly payable In German n
marks. Therefore, their value has
been fading away so gradually. yet sc
surely, for the last two years that II
can drop out of sight without any.
thing like a financial convulsion.
So the direct effect OF German
bankruptcy on the American people
would not be very startling or far.
reaching. Many thousands would
suffer, but they would suffer in ri.
lence a san equal number Of blueslxy
spectators suffer every year-as
many thousands more are going TO
suffer for their self-determined folly
in preferring European government
speculation to an American invest.
ment since the great war. They
would suffer, but their suffering
would cause no panic. no shivering OF
the pillars that stand under the
country's structure Of finance.
But what will be the effect on a
German collapse on France. on Italy.
on Belgium. on England, II Germany
cannot pay her war indemnity 10
these nations? What can these ma.
tions pay to others whom they owe?
These only distant questions involve
the whole European situation. as dis.
cussed at Genoa and now being dis.
cussed at The Hague. They will be
considered in n future article.
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