Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-03
berlin EXCHANGE
. OPENS TOMORROW
Banks Signify Willingness to
Support Issues That
Show Weakness.
BY EDGAR ANsEL MoWRER.

BY EDGAR ANSEL MOWhEn.
~ Gable to The Star.
BERLIN, Germany. September 3.CP)
Being unable long to keep tie
stock exchanges closed while proclaim
ing that the German position is fairly
normal" government authorities, after
long consultation with Reichsbank and
treasury officials and private banks
have somewhat reluctantly decided to
begin business today. Limited buSl-
ness, time buying and selling and short
selling are forbidden.
The banks have announced tfeir
readiness to support" stocks that seem
to sag too heavily. The Reichsbank
has more or less uneconomically re-
duced the discount rate to per cent
in order to keep 8 per cent bonds at
sonething like par. Yet virtually every
one doubts II the present unofficial
prices for general stocks can be held
in even limited open market.
Private Selling.
Since the stock exchange holiday was
proclaimed July 49, spectators have
made each other private offers. Be-
tween banks and brokers certain num-
of shares have changed hands, prices
serving as barometcrS. Whereas to the
Germans those prices seemed low
enough, foreign observers are inclined
to believe that they are able to be
held so high only because the Ger
mans themselves have ignored the depth
Of the catastrophe in which they nave
been suddenly plunged.
These prices show a reduction on
leading stocks amounting to between
20 and IS per cent Of prices before the
stock exchanges were closed. An eX-
ception is the Dresdener Bank, which
was saved from bankruptcy by gov
eminent subsidy and has lost more
than half of It's former value. The
Danat Darmstaedter and NationaD
Bank; notably supported by govern
ment guaranty, has lost only about 20
per cent.
The situation seems to be as follows:
Every one here realizes that Ger
many is now sharing the world def1a-
ton on an almost unprecedented scale.
Every one except the immediate VIC
tins of the process and perhaps gov
eminent authorities realizes that eco
nomic restoration can best come
through a Fastening Of this process.
But since the process is not pleasant,
the big industrialists have managed
to secure governmental cooperation
in their efforts to retard it. The banks
themselves with the industries have an
interest in putting good face on a
bad situation. But what small public IS
left likely to desire ready money Wi!
want to sell and find few takers except
supporting banks.
If the selling tendency is small, the
banks readiness to absorb stocks may
prove sufficient to prevent any notable
slump. If the selling desire is great, as
may be imagined, the tendency will be
downward despite artificial support
Sounder Level Desired.
Foreigners should realize that new
slump, If it comes, will not mean any
worse situation in Germany-merely an
adjustment of a situation which be-
came bad during the crisis, and there
by offers real possibility for genuine
recovery.
II is possible, if German industrial
lists and bankers see that they are I'M
able to prevent a heavy price decline
in stocks, that they will be the more
willing to aid the deflationists policy
which, after a short crisis, could pre-
pare the way to recovery on new and
sounder level.
Copyright, 1917