Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-12
Britain Disturbed by
Luther's London Trip
BY A. G. GARDINER.

LONDON, July 1.-THE sudden air
plane descent of President Hans Luther
Of the Reichsbank on London Thursday
afternoon, coupled with the scare heads
displayed by the newspapers that he
had come to ask loan Of $3.50, 900, 900
to stem the flight from the mark. Gre
ated alarm in the city, which is still
doubtful whether q European financial
crash has yet been averted.
The long delay in bringing France
within the orbit of the Hoover plan has
dissipated the confidence which the
proclamation Of the scheme aroused
and left the public in mood Of nervous
anxiety. But the purpose Of DR.. Luther
visit was to explain to Gov. Norman
Of the Bank Of England the desperate
situation in Berlin. This he did later
where both called before proceeding to
the headquarters Of the Bank for Inter
national Settlements at Basel for an ex-
animation Of the financial crisis in
Central European countries on Monday.
In regard to the genesis Of the crisis,
q remarkable article appeared in the
London News Chronicle Of Friday, CIV
ing thrilling narrative of the inner
history Of the events, with an hour-by-
hour record of the momentous June l6,
when the Credit Anstalt, Austrian ma
tional bank, trembled on the brink of
collapse and threatened a general ava
lanche. The article describes the emo
tional scene in Vienna when Gov.
Norman's telegram was received placing
a credit to Austria In the Bank for In
ternational Settlements. The writer
states that Mr.. Norman was unaware.
when he sent the telegram; of the
French ultimatum to Austria to re-
nounce the AuStro-German customs
union as a condition Of making a loan
and Of the Austrian rejection Of the
French condition
This sensational escape from a Euro
pean catastrophe, says the writer, for
tunately conceded with Secretary Mel
Ions presence in London, and the next
day his discussions with British states
men enabled him to realize the urgent
gravity OF the case, and Ibis reports to
Washington were sufficiently weighty to
turn the alreaGS trembling scale.
-
The most Interesting revelation is
the statement that President Hoover
hrst cabled France that for the sake
Of its effect on international relations
she should take the initiative. The ar
ticle continues: France was the coun-
try most wildly concerned and it was
felt that q word from her would have
done more 70 promote international
goodwill than from any other country.
France lost her opportunity. She fol-
lowed up the blunder in Vienna by
playing for time and asking more in
formation. Mr.. Hoover dared not wait
He was convinced of the urgency for
action and on June 20 issued his ia
nous declaration. How urgent the DO
efffNY1 rAo llu q h,,k =, d, "A
that just as he issued 1t a cable arrived
from President Won Hindenburg begging
Americas help. The Reichbank's re-
serves were down to the 40 per cent
minimum at last. Over the anxious
week end DR.. Luther failed to secure q
rediscount credit from either London
or New York, but on Monday the tide
turned"
But the turn Of the tide is only ten
tative and the situation has still to be
consolidated by foreign credits, for
which DR.. Luther has gone to Basel. A
good impression was created here by
the German decree making compulsory
the giving of q guarantee by banks, In
dustries and trades to the Gold Dis
count Bank. The guarantee amounts
to $l25, 000, 900, which should provide q
solid basis Of negotiation for fresh for
eign credits and reasSure foreign cred
itors regarding the security Of their ad-
vances and credits.
On the other hand, the nervousness
Of the city has been acceptuated by the
collapse of the North Wool Combine at
Bremen, with liabilities Of $50, 000, 600
London was heavily hit by the failure
and the circumstances of the failure
discussed at q creditors meeting on
Friday, revealed disgusting features OF
postwar financial standards.
copyright, is3N.