Evening star., 1931-12-27

long De1Ore II emerEeS upon the world.
(This is useful to remember now, when
it is fair to hope there are under way
the beginnings of benevolent forces
which will emerge curatively some
months in the future)
Germany Faced Ruin.
The German crisis which set America
back last Spring began in an election
IN that country in September, 1880.
In that election a new party with
revolutionary leader having a Fascist
political philosophy. Adolf Hitler, cast
the largest single block of votes. The
next largest block was cast by another
group OF radicals. the Communists, and
Communists and Hitlerites combined
cast majority.
That outcome frightened German
capital. The fright was also accelerated
by the fact that Hitler, in his program,
had announced or implied that he
would seize the money Of Jews and
exile their persons from Germany. A
suggestion so foolish as seizure of the
money of any class of citizens was
bound to frighten all capital owned by
all Germans, even had there not been
fright enough in the fundamental part
OF Hltler's program.
ltal began to stream steadily and quietly
from the country. BY May, 1881, Ger
many was a financial shell depending
to an acutely dangerous degree on eem.
porary short term borrowing from
abroad, much of it from America. BY
June of last year the German Reichs-
bank was in imminent danger of COL
lapse, the German government in dam
ger OF overthrow. the whole social Struc-
ture of Germany in danger of chaos.
President Hoover announced pro-
posal for years 'postponement of in
tergovernment debts. Unfortunately,
France took a long time to approve
Whether subsequent events would nave
been different and happier If France
had agreed as promptly as every other
nation did-that is one Of those might
have-beens of history, about which any
one can speculate as he pleases. The
fact is, whether due to Frances delay
or not, Germany went from bad to
worse. Not only that; the debacle in
Germany contributed to bring about
another and worse crisis in another
country.
Pound Caused Alarm.
1t is fair judgment to say that the
fall of the British pound from its fixed
gold basis on Sunday. September 81,
1881, was the most disastrous peace
time crisis that ever struck any coun-
try or the world. During the week pre-
ceding the writer of this article sat at
breakfast with two other men. One
was banker from West Virginia, and
he was pleading that real estate mort
cages ought to be made eligible for dis
count at Federal Reserve banks. Those
i G. -
Bank of England" The other two men
at the table smiled whimsically at each
other, in common knowledge that the
Bank of England was at that moment
in a state of anxiety differing from the
distress of the bank in West Virginia
only in its greater magnitude. that
British statesmen we're at that moment
pleading with American and French
statesmen and bankers to help save the
British pound with the same sort of
anxiety that a banker in an Iowa vii
lage pleads for help to save his little
$4,000 institution. LAS safe as the
Bank of England" was until September
1881, one of the worlds familiar COM
parsons, almost an integral part OF the
language 1t ranked. indeed. with an
other comparison that the world made
for uncounted centuries until 1903, ne
can no mole oo IAldV 'iAoti 4iS AL WAY
air"
The fall of the British pound from
the gold basis on September 81 last,
caused in America, directly and lndl-
rectly, condition which seems to the
present writer fair to describe as the
worst panic the country ever endured.
AS one consequence. all the nations OF
the world, themselves panic-stricken,
began to withdraw gold from the
United States The United States dur
ing one month gave up several times
more gold than was ever given up by
any other country in a similar period,
peace-time or wartime. (After the
drain ceased, for about eight weeks
now. gold has been coming back to the
United States in such quantities as to
show that the world has come to think
of America as the safest possible de-
pository for goldD
Hoarding Brings Evils.
Accompanying the loss of gold, banks
national and State-were failing at
the rate of about 20 day. Currency
was disappearing, chiefly into fright
ened boarding, at the rate of about
lasted, accelerated the failures of
banks and the failing banks acceler-
ated boarding. The double attack on
our credit structure, from abroad
through Withdrawals of gold and at
home through boarding and bank fall
ures, came gradually to an end, chiefly
because of the organization by Presi-
dent Hoover on october of the Ma
tional Credit Corporation.
have said there was third crisis
and that so far as it had a foreign
origin it arose from renewed threat Of
calamitous conditions emanating from
Germany. 1t is certain that Germany
is going to cease paying reparations in
full, but the world has become used to
that. 1t seems likely that the Hitler
ties are now about to come to some
degree of actual power in Germany.
But to this prospect also the world has
become used.
happen in Germany and about German
debacle. possibly even slips deeper into
debacle. With the world in this re-
spect goes the United States. At the
time this Is written it is impossible to
have any confident view about the i'm
mediate future.
Meanwhile the one sure permanent
characteristic of every such depression
as has afflicted America since 1929 is
that some time it ends. Always they
come to an end and usually the wind
up is under way at the very moment
when conditions seem blackest. The
turn can be sudden, the up-bound swift
as 1t was in 1879.
Munich Leads German
Cities in Milk Drinking
BERLIN, Germany.-The Munich
N6adicnl IIrank1n aefn,aiehar the Try,