The New York herald., 1922-07-30

Special Gable 10 THE New YORK HEsAtp.
Copyright. 1879. by THE New YORK HERALD.
New YORK Wer~Id Rnrrr~.
Berlin. July 70
The economic depression has hit
Germany three months earlier than
most pessimists had expected. While
still discussing the merits of a mon
archy and republic, the German Cabi-
net has abruptly sought compromise
in the conflict with Bavaria so as to
have it's hands free to meet the critical
financial situation.
THE Government. as yet without an
economic policy, hastily called a con-
ference of the leading business men
last week to find a way to avert n
currency famine. There is still plenty
of business in Germany, but the
medium for production and exchange
is lacking. Manufacturers who have
no capital invested abroad are implor-
ing the banks to advance them credit
TO buy raw materials and pay wages.
AS result of the money scarcity un-
employment is already becoming APP
parent. despite the harvest demand for
labor. Symptomatic Of the beginning o.
depression is the fact that the most re-
sponsible manufacturers can no longer
get credits at home or abroad. As re-
suit they are una Die 10 buy the neces-
sary raw materials 10 meet the expected
winter orders.
Business SlackeninG
Several textile firms have been
obliged to DISCHARGE their employees
although plenty Of orders are in sight
Hugo SHINES has stopped all construc.
tion on his Rhine metal works and is
abandoning other extensive construc-
ton programs. One Berlin apartment
building owner who received a loan
this spring to add another story to his
apartment now finds it impossible TO
get the money to put on roof
Large firms, notably the krupps and
others. with slow turnover, are finding
themselves obliged TO cancel their or.
ders because OF want of ready money
with which to purchase the necessary
raw materials abroad. This means un.
employment before winter. The Govern.
ment is taking no steps to purchase fur.
ther foreign securities to meet repara-
lions demands
In conferences with German business
men the Government admits that the irs
terror financial problems are beyond Of
ficial control and has appealed for their
assistance The immediate crisis is tn,
result of the currency shortage. The
Government is urging manufacturers ia
mobilize their bills OF exchange in an
Ia
Halt Printing of Marks.
The Government is hesnant about
overworking the printing presses again
because OF the assurances given the
Allies and because OF the fear OF fur
ther depreciation in the mark. Also the
Government has decided to cease dump
ing foreign money in the domestic mar.
ket In an attempt TO check the abrup-
slump In the mark. In previous crises
In order to prevent a drop in the marx
the Government spent large sums buying
its own paper marks with foreign money
received from German exporters.
But the Government is now beginning
to see that this method does not prevent
the mark from dropping and only inn
poverishes the Government to the advan-
tage OF speculators. The money short
age Is accentuated by the fact that
farmers and Gamers need 200, 900 ,0O0, 900
paper marks for the harvest.
In addition to all this the Government
must face n new dilemma in October.
when the compulsory 100000. 900 gold
mark loan falls due Attempts TO coll
lect IL then would only intensity the
industrial crisis, which threatens to put
millions OF workers i'm the streets. Off
cial circles now assert that Germany
could not save herself even though the
reparations obligations were removed
Hans Kraemer. a leading manufac-
turer and vice-presdent of the Economic
Parliament. told THE NEW York HERALD
correspondent that I'VE are going down
hill now at rate where only a repara-
tions moratorium and large loan can
save the mark. though we haven't much
hope OF getting either"