Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-13
BIG BANK CLOSED
IN GERMAN CRISIS
Runs Are Made on Others.
Deposits Guaranteed by
Government.
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Continued From First Page)
! ible signs of panic among the popula-
ton. to whom the governments mani
festo had appealed not to lose its nerve
What the. banks were doing today by
paying out only a certain percentage
of Withdrawals is only makeshift.
Crucial Time Seen Thursday.
A crucial time is looked for on Thurs
day when many civil service employees
are due to collect their semi-monthly
pay. Then. unless the Reichsbank can
fill its Golfers quickly. it may find it
self in a position which would necesSi-
tate printing emergency currency.
Such currency, it was explained. was
not to be COMPOUNDED with the imitation
money Germany had in 1923 when the
printing presses could not keep up with
the decline of the mark.
Necessity for issuing emergency cur
rency. it was emphasized, would arise
from a scarcity of notes of small de-
nomination, resulting from refusal OF
the Reichsbank to print money beyond
its 40 per cent gold coverage despite
In the last analysis Germany's one
hope appears to be for help from the
World Bank
1t was announced that President Won
Hindenburg would interrupt his visit
at his country estate near Neudeck and
return to Berlin Wednesday.
The Darmstaedter und National Bank,
one of the five largest in the country,
with capital and reserves of about
$50 900 900. on its SO branches in Berlin
and on others throughout the Reich
hung notice that it had been compelled
to suspend payment.
Guarantees Deposits.
The notice carried the assurance,
however. that the government would
guarantee all deposits and that orderly
liquidation" of the banks business would
be carried out
To protect other banks and the gen.
eral credit structure of the country, the
government decided to issue an emer-
gency decree binding all importa mt
banks into a credit block through which
any weak unit would be protected by
the assets of all, and creating special
commissioner of devisen" with ex-
TIRE ordinary powers to combat the alarm
ing run on foreign currencies.
The emergency decree. issued under
the so-called dictatorship clause of the
Reich constitution, was signed by
President Won Hindenburg and under 1t
the Reich undertakes to guarantee de-
ficiencies arising from the Darmstaedt-
ers -liquidity."
simultaneously, the German govern
ment issued a proclamation describing
this guarantee as applying before all
else to hundreds of thousands of small
depositors in order to save them from
utter ruin.
A proclamation appealed to the
German people to keep their heads and
not to make things worse by losing
confidence. 1t explained that the
Reichsbank and the Gold Discount Bank
are seeking to obtain credits abroad for
the longest possible term in order to
aid private business.
Unable to Cope With Claims.
Meeting the run which set in upon
other big joint stock banks today. these
banks paid in full as long as possible,
but we're unable to cope with the claims
of multitudes of depositors who be-
sieged paying tellers. AS the morning
wole on these banks themselves we're
obliged to ration payments according
to circumstances. some restricting their
payments to % per cent and others to
10 per cent of the demands presented
The Prussian minister of trade
ordered stock exchanges in the province
to remain closed today and tomorrow
and at the request of the central gov
eminent all other bourses did likewise
in order to forestall a possible panic.
Chancellor Heinrich Bruening and
his cabinet members. worn out by 40
hours OF almost continuous efforts to
save German credit and industry
broke up their conference with leading
bankers early this morning and snatched
a few hours sleep in preparation for
resuming the struggle later on in the
day.
A decree embodying substantially the
same measures as are contemplated now
would have been promulgated last night
it was already in type-but the bank
ers developed unexpectedly stubborn
opposition, fighting against making
themselves liable for the huge losses
Of the Danat Bank, as the Darmstaedter
und Nsti-nal is Familiarity known.
Inclined to Credit Block.
When the bank finally was thrown
overheard, with the government itself
assuming to guarantee it's deposits, the
financial leaders seemed more inclined
to enter national credit block, where
by they would stand or fall together.
BY this time. however, the m rnng
papers had gone to press and it would
Rave been impossible to reach the
IyF, fob he