Evening star., 1923-05-09
nv HIRAM KELLY MODERWELL.


Following is the eighth of Mr.. Moderweli.s $
series of articles on financial and economic
conditions in Germany.i
Special Correspondence Of The Star and Cbica so
Daily News Foreign Service.
BERLIN, Germany. April 2o.-An
American, who has lived for two years
III Berlin, said to me recently. IF
had begun with Il capital OF $500
when l came here. and had sys-
tematically speculated with it. | could
lave paid all my living expenses
supported my family in relative
luxury and still have $200 clear in
my pocket
For his amusement he had figured
the process out rather cafeluliS'
There is no doubt that he could have
done it, without any special expert
knowledge simply by "bearing the
mark. With his dollars as security
he could have borrowed marks ana
bought things or value Win thehi, M
When the time came TO repay the
loan the mark would have fallen. he
could then have sold his goods at IN
creased prices. and repaid the loan
with money worth perhaps halt what
il was when he had borrowed. The
other half would lie clear profit.
Hundreds Of thousands. even mil
lions. OF Germans live or supplement-
their incomes in this way. but those
who do it best Of all are the indus
trialistS.
Mark Output Enormous.
The process of imitation which has
made this possible has been going on
continuously III Germany since the
armistice Germany has more than
5000. 900 900. .O00 marks in circulation
and is printing more in thlrty-three
print shops at a rate OF "oou'
100000 900. 600 It week.
At first. just after the armistice'
the government printed money be-
cause it could not help itself. just as
France did. But France was able
to borrow huge sums in America,
and Germany was not. Therefore,
France was able to- stop imitation and
Germany waS'not. For Germany had
been obliged To pledge all her re-
sources i'll payment of vast ui' ,
named sums %: money. 40 one dar, 81
lend to such Il country. 70 this rN-
tent the GrrnHnS can claim with
some justice that their imitation Was
due to rcpdrdtioES.
Later, it lcramc just rs true that
Gcrinany'S failur" /" ny r"r:trati"uS
was partly due to initiation. Imitation
caused Il constant riS" III prices and
upset the governments taxation syS-
tenn, while constantly increasing its
expenditures. And the government
resorted continuously to more in
flation.
Profited by Initiation.
The point came when foreign pur-
chasers of the mark lost all con-
fidence in it's stability and demanded
for their dollars perhaps twice as
many marks to protect themselves
against depreciation. Thence came
the double valuation of the mark. It
took $500 worth of marks, rcckored
in German purchasing power. to buy
500.
When this point WIS reached. in
nation became good business ior Ger
mans exporting to hiGU currency
countries. They could get their Labor
and domestic raw materials for ono
l'a1f or a third OF the eos! elsewhere.
The only condition was that the
process of imitation should b" continu
Gus If it ceased there would surely
come Il business crash, involving
bankruptcies, unemployment and pos
sibly bloody revolution.
From this point on the induStrialists
and, indeed, business in general had
a definite interest in depreciatinS
German exchange. They used all their
influence (until tho Rulr invaSion) to
keep the mark falling. SHINES has
consistently opposed any attempt to
stabilize the mark by stopping infla-
tion, always saying, 1t is not possible
yet"
Part SHINES Played.
Did SHINES and his friends "en-i-
neer" tho depreciation OF the mark:
Did they Coerce the government or
cOnspirc with the government 10
make il deprcciate. such n charge
cannot be proved. B3t coc""ion or
conspiracy was hardly necessary. The
government was caught IN its own
merry -.o-round and could not escape.
For the more money the govern
ment printed the faster its value de-
preciatcd. While the quantity of
money increased. the total value of it
"A
winter it was worth only about $780,
100000, or little more than third Of
the reichsbank's gold reserve. Thus
the increase in the quantity of money