Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-19
GERMAN FINANCE
CRISIS HELD EASED
Complete Government Con-
troll Established, CONNER
ciaI Attache Reports.

The financial crisis in Germany has
subsidized following a series of emergency
DEGREES establishing complete control
over foreign financial transactions and
cbyiating further important withdraw
ais and the flight of German capital,
the Commerce Department was advised
today by Commercial Attache. H. Law
renee Groves, at Berlin.
The severity of the crisis. Mr.. Groves
said, left German business in weak
ened condition despite the early reduc-
tion of the Reichsbank discount rate to
10 per ceat and the collateral loan rate
to Is per cent. He asserted that bank
charges to customers are still so high
that business is greatly hampered in all
lines.
Foreign Exchange Provided.
The Reichsbank now permits estab-
1ished end reliable firms to secure ade-
ouate foreign exchange to pay current
and future import purchases, Mr.,
Groves said. but forces foreign exporters
to maintain a revolving six months
c. lit equivalent to their credit out
standing through banks to German Gus
toners on July 10 for merchandise ac-
counts
The commercial attaches eabled re-
port said the Stock Exchange was stun
closed, with probable reopenlng early in
September. The extent to which securi
ties have declined is. therefore not
evident. Small lots of the best Ger
man industrial issues have been pri-
Vately offered at prices well below the
last quotations before the crisis, but it
is assumed that these o1ers reflect the
urgent necessity of a few holders to
obtain cash, without representing the
trading value of such stocks when the
exchange reopens.
Continuing, Mr.. Groves said:
The government has secured control
of both the Darmstaedter Bank and
the Dresdner Bank and must continue
their operations in official hands for an
indefinite period Domination of the
banking field is further assured through
government ownership and manage
ment of ether banks, notably the Rem
tsnbank, the Gold Discount Bank. the
Reichscredit Anspalt, the Bank OF IN
custrial Debentures and Seehandlung
together with the patrol OF IS per cent
of new acceptance and guarantee
banks The Deutschebank is the only
outstanding exception.
Capital Flight Continues.
although capital fight through large
transactions was effectlally prohibited
the drain of funds from Germany con-
tinues on a small scale, as small "a
vestors can obtain foreign exchange IN
units below $3.50. This movement, nj =
ever. operates slowly and Is not imme'-s-
ately felt, while the high interest rat IS
have forced a large proportion OF the
circulating currency in the banks when
are now abundantly supplied with marx
funds. but lack borrowers at the pres
ent excrbitaat rates.
'.Thus banking has not been sub
esantially reduced since the crisis, eX-
cept for saving banks, many OF whose
customers are small working people VINO
are boarding in memory OF the HlEla-
tier This movement has. for the hfst
time. interrupted the steady gain CT
savings deposits. with the June tlgure
ri ii OLA. 500 600 marks. or Sl5o.e00 =
600 marks bsl0w that o. May. While the
reduction in July was atill larger
sThe crisis has sg3in proved the
esgentiaI oreerliness and discipline Of
ire German public when confrontea
.rith a shutdown OF all banks and Win
government administration by emer-
0ency DEGREES issued almost daily our
ing the most difficnlt period TRACE
and industry were greatly affected by
the crisis, but daily business was carflea
on as usual by great majority OF en-,
tsrprises, as reflected in production and
employment figures"
JobIess Increase.
Mr.. Groves said the fetal unemploy-
Ynent at the beginning OF August
amounted to 1910 $50. Of whom l,2o5,-
900 received ordinary relief; l,027 GOO
emergency relief. and the remainder d.
pendent on local welfare. There were
a total Of 962 900 unemployed during
July. Trade union unemployment IN
June, he said, amounted TO 3o.2 per cent
OF all members. with additional ia per
cent working a short time. The bet
showing was made In mining, chemlc3lS
and textiles. with wood workers and
metal workers in a less favorable posi-
ton. he explained
According to Mr. Groves report.
Bankruptcies in July totaled 1913 and
reeeiverships. 657.
The commercial attsche said call
money increased during August irorn
IL to "A per cent. bank loans from
IS TO 20 per cent while the private
discount market remained practically
nonresident lie adde's that further
action from the government Is awaited
in several unsettled problems, including
Official pressure 20 break the domestic
q price rates, particularly IN ret2N trade
and the establishment Of some form
of central control for government
financial institutions nov variously ac-
rninistered. such control undoubtedly
70 have supervisory power over what
remains Of German pFiVlte banking.