Evening star., 1924-01-06
BY FREDERIC J. HAsKIN.

Necessity, says an old adage, is the
mother Of invention. The whole world
has been informed in the years since.
the armistice of the depths of de-
probation to which the once proud
mark, the monetary unit of the
German people, has sunk. 1t has be-
come Of so little value that the lower
denominations of the currency-such
as mere hundreds and thousands
have been wrapped up into packages
and used as blocks for children to
play with One German mark used
to be worth nearly as much as the
American quarter; now there is moth
ing small or cheap that one mark
could buy it. In the ordinary pur-
chases of articles of necessity the
prices must be quoted in hundreds,
even thousands of marks.
Such a situation could not last in
definitely, especially since it has been
Sst1hs Ss RSrosFsssIysy ,onI faea sea
with the necessity of doing some
thing to stabilize their currency.
have invented q new medium. the
rentenmark. II represents the latest
experiment in national finance.
ernment issued a decree establishing
a new bank of issue. known as the
Rentenbank. 1t has already begun
operations, but the plan still is re-
garded as in the experimental stage.
The capital of the bank is 1900, ,000, 900
rentenmark. The rentenmark is the
new unit. 1t has the value of 1/270o
kilo of pure gold or at the rate OF
400 rentenmark to one kilo Of gold
A kilo or kilogram weighs about "a
pounds.
Capital from Compulsory Levies.
The capital of the Rentenbank is
being raised by compulsory levies
upon the real property Of the German
nation. To be recognized as having
value and stability all paper cur
rency must have value back of 1t.
The reason that American paper cur
rency Is stable is that the people
know that gold 10 piled up in the
Treasury to make it good. The
trouble with the German mark was
that the people learned that there
of %as it, Therefore tse rst move eain in
establishing this new currency was
to put value back of 1t, No gold was
available. so the government decree
automatically placed a sort Of mort
gage on practically all Of the real
estate and other actual property Of
tho country. to the extent Of I per
one-half Of the capital is con.
tributed in this way by the holders
Of agricultural land, which has come
to be regarded as the most valuable
Of all securities in Germany. Hold
ers Of city property have been ex-
empted because, by government regu.
lation, rents have been kept on .
very low basis. This has reduced
the comparative value of the city
property and, therefore, it was con-
sidered unfair and unnecessary to
include such holdings.
Factories and such Industrial prep
critics, whether in city or country,
however. contribute to the extent Of
owners Of these properties turn over
bonds which are mortgages upon
their holdings to the rentenbank. These
run five years and pay s per cent In
terest.
Marks Issued Against Mortgages.
with these mortgages or liens on
both the agricultural ana industrial
property Of the country a. . basis
Of value, the rentenbank is issuing
rentenmarks. The holder Of rem
tenmark In the owner. to the extent
OF a very small fractional proportion.
Of the general mortgage on the phys
ical property Of the whole country.
In the same way. the holder Of . u
bill In American money 10 owner ia
that extent Of the gold piled In the
Under the decree. the gevsrnmsn,