Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-15
GERMAN CURRENCY
CONTINUES TO DROP
Schacht May Be Recalled
by Hindenburg to Head
Reichsbank.
ny JOHN F. sINCLAIR.

Special DiSp0tcn,t TO 3nS SSHh'
NEW YORK, June 1e.-The German
financial crisis may. come to q head
this week. Chancellor -Bruening has
threatened to resign If special session
Of the Reichstag is called. President
Won Hindenberg on Saturday, backing
I'D DR.. Bruening, forbade calling the
Reichstag. .a
The immediate difficulty is the flight
of the mark from Germany. For the
first two weeks of June the Reichsbank
sold more than 100000 worth OF
foreign exchange
Adolph Hitler, Fascist leader, used
the week. end to attack the Bruening
government. Many believe he Will head
the next coalition government. But
there are others who feel that 1t will
not 20 that far; that If DR.. Bruening
decides to quit President Won linden
berg will call DIR. Hjalmar Schacht,
former president Of the Reichsbank,
and give him dictatorial powers to meet
the situation.
In the meantime Secretary Of the
Treasury Mellon Is on his way to Eu-
rope and Is expected to confer this week
with financial leaders in Great Britain,
France and Germany with q view to
seeing what can be done.
Chicago Bank Merger
Philip r. Clarke of Chicago president
Of the Central Trust Co. of Illinois, is
to be the president of the new $780,
900, 900 Central Republic Bank & Trust
Co, which IS being formed Dy the
merger of the Central Trust, the Dawes
Bank and the National Bank OF the
Republic.
The merger will be effected within
the next 80 days. When completed, 1t
will have an invested capital OF $685.
600 900 and deposits of $285, 000, 900
;. making it the third largest bank in
Chicago.
When Mr.. Clarke was asked last
week to confirm or deny rumors that
1 this was merely a stepping stone to
Charger merger In Chicago, he denied 1t
most emphatically.
mot a thing to that rumor," he said
SI'ye heard 1t before. We have Few
points to clear up, but we are ready
now to take care Of all Of our old Gus
toners plus any new customers that
come in. The Chicago banking situa-
ton Is clearing up very rapidly
Mr.. Clarke began his business career
as an investment banker. 1t was only
a few years ago that he deserted In.
vestment banking for the presidency OF
the Central Trust Co.
Florida Inheritance Tax.
Col. Peter o. Knight Of Tampa, lawyer
and capitalist, has lost his long hight
to keep State inheritance and income
taxes out of the Florida statutes.
Florida, for the first time since Its
incorporation as a State, has oecloeu
ito impose a State inheritance tax. IL
was necessary for Florida to amend It's
constitution, which forbade the taxa
ton of inheritances and incomes OF It's
citizens. This was accomplished last
the constitutional provision was re-
pealed. .,.- -.
States in imposing these new taxes.
ONLY two States are now without state
inheritance taxes-Alabama and Nevada.
Wage Reduction.
Yar,es Ford Bell of Minneapolis,
MINI. president of General Mills, Inc,
of which the WaShburn- Crosby Co. Is
one unit. tells American business men
To 90 slow on the matter OF wage re-
duction. Mr. Bell does not think tnat
reducing wages spells way out OF the
Spresent depression. .,,.
"Tf we reduce wages" he said, we
reduce the earning power or income Oh
the community, and in turn lessen the
find ourselves in vicious circle
Mr.. Bell does not see any evidence
to indicate that wage reductions 80 1ar
have accomplished anything.
Newsprint Price Cut.
Practically the whole newsprint IN
d,istrv has now fallen into line Win the
program of price reductions begun py
the Canadian producers. The latest Is
the international Paper Co., whose ar
raneement is somewhat different from
the straight retroactive cuts made py
the Canadian companies.
Thus the International has made
IS cut per ton for definite period, In
New York, April OF this year 10 De-
cember 81, 1882. Proportionate rates
have been worked out for other geo.
graphical zones. It is further provided
that on acceptance of a six-year con-
tract. the price would be guaranteed
not to exceed $62 a ton and to average
not more than $50 ton, this last figure
being the new, reduced price.
. Since International still has several
two and three year contracts running,
1t is felt Observation-Disclosures would De
glad to accept the new six-year con-
tracts for present ones.
It is difdcuIt to know at this time
whether these new prices have rear
basis In the conditions Of the industry.
The form worked out by international,
one of the largest paper companies IN
the world, seems bit more scientlnc
, than the others. But the newsprtnt in
dustry still has some nard sieooing
ahead of it with excessive plant, capital
imitation and the very SLOW expansion
of consumption.
Doubtless, the policy of the Canadian
government in forcing development OF
power facilities above its needs in I'M
derpopulated sections Is partly respon-
sible for the tight place Canadian mills
are in today.
Credit and Price Level.
The Royal Bank of Canada, the
largest In the Dominion, continues to
assert that there is a mathematical
relationship between, the volume OF pro-
duction and credit on the one hand:
and the price level on the other.
The accuracy with which the lines
showing the theoretical price level cor
respond to the actual price level Is in
itself q remarkable verif1cation OF the
quantity theory of money"
Then it draws the conclusion that the
responsibility of the price level fol-
countries operating on a gold basis lies
almost altogether with the central
monetary authorities Of the United
| States, Great Britain and France, which
/. hold about rs, per cent of the monetary
gold stocks of. the world"
The inference is very clear. This
large bank, in its latest monthly let
ter, agrees with Carl Snyder, economist
4 of the Federal Reserve Bank Of New
4 York, that overproduction Is not thu
1 cause of the business depression, bu
rather it largely lies in the control Of
the money and credit power.
More and more economists arerStudy.
ing the depression from this angle.
(Copyright, 1881, by the North American
Newspaper Alliance, Incl
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