Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-07-06
GERMANY FACING
FINANCE PROBLEM
Chancellor Publicly Bares
What He Describes as a
Grave Situation.
BY GUSTAV STOLPER.

BY Radio Dispatch to The Star.
BERLIN, June 5-Chancellor Bruen-
ing has chosen a new ceremonial form
of making his financial program public.
He summoned the Federal Council as
the representative organ of the Garman
states and in the presence of the
Reichstag deputies and journalists spoke
of the gravity of the situation and the
difficulty of the task. The straight
forwardnesS and energy with which
he spoke secured good public reception
for his speech, but the material and
political difficulties with which the
government must contend have not
thus been made easy.
Finance Minister'S Showing
The program with which the new
Finance Minister Dietrich complemented
the chancellor's speech differs to its
advantage in many points from that
OF his predecessor. Above all, Dietrich
exhibits an earnest desire to effect
savings. But even he presents no
solution of the monstrous task con-
fronting Germany's financial policy.
He, like his predecessor, bases his
marks, although it is obvious that the
actual deficit will be much greater be-
casuse unemployment this year prob
ably will greatly exceed the 1880 900
figure upon which the budget was
based and tax receipts are still
estimated too high.
Barring a miracle, the deficit in the
Reich alone will be at least 800 900 900
to 400,000,000 marks more than the
government assumes. To this must be
added deficits of municipalities, amount
ing to from 100000 to 100000 and
the Reichsbahn deficit of 500 900 900.
And 1t is July and the ReichStag is
impatient and wants to adjourn.
ChancelIor's Purpose Outlined.
Chancellor Bruening and his finance
minister thus appear to be contenting
themselves with having the Reichstag
first attend to the most urgent matters;
then there will be two months, pause
and in the Autumn it Is promised q
sweeping reform will be taken up.
Perhaps a hoped-for miracle will occur
in the meantime.
New York especially is being watched
with tense interest, fer it Is felt a
solution Of the German crisis depends
above all on the overcoming of the
American crisis. Every move of Wall
Street, every word from the ad-
miniStration and every American
economic symptom is carefully observed
here. But the situation is too
optimistically estimated.
The failure of the Young plan was a
severe disappointment. It is known that
this is due, not only to unfavorable
criticism Of the loan in America, but,
above all, to Parker Gilbert's unfavor-
able report and also to certain critical
happenings in America finance.
American Loans Lacking.
It had been expected that flood Of
American loans would flow to Germany
following the Young plan, but they
have not come German industry can
not be revivified without foreign credit
In Germany, meanwhile, the dis
proportion between interest rates in the
open market and the rates of the loans
becomes greater. Whereas the Reich
bank has reduced its discount rate
seven times since the beginning of the
wear, and Berlin at per cent is only
/ per cent above London, 8 per cent
mortgage bonds can still be had under
par and new emissions in large amounts
are as good as impossible.
German Nationals have already decld-
ed to reject the taxation program and 1t
is Doubtful whether the Socialist OPP
position will willingly help the govern
ment. Such help would, in any event,
come dear.
Copyright, 1900