Evening star., 1933-04-16
GERMAN BANK GOLD
RESERVES DECLINE
Holdings of Metal Are Now
$16O,O00,000, Says Lat.
est Report.
Special Dispatch to The Star.


NEW YORK, April 15.-Without in
cluding the gold released by Germany
in connection with the repayment OF
July, 1881, by the Federal Reserve
Bank, the Bank Of England and tho
Bank of International Settlements, the
gold holdings Of the Reichsbank, ac-
cording to its latest statement, have
dropped to $160, 0,O00,0 900.
This lowers the gold reserve on which
German bank notes rest, to small
figure. The attitude Of DR.. Hjalman
Schacht, head Of the Reichsbank, Is
that the cost Of maintaining q heavy
gold reserve In these times is not COM
pensated by the prestige Of holding
1t up to what is considered . legal
level.
Decline Has Been Steady.
The decline in the gold holdings Of
the Reichsbank has been persistent IN
the last few years. At the end Of
1928 and into the first part Of 1929
these amounted to $3.50. .ooo, 900. At
that time the Bank OF England held
France 81 1884, 100000. Germany then
had in her national banks slightly more
than the amount shown by Argentina
and about $lo0,oo0,oo0 more than
Japan.
In May, 1929. Germany's gold hold
ings had dropped $420 900, 900, but by
the end of December they had recov-
cred to $544,000.o0O and in August.
1880, we're up to 1924 100000. From
this level they dropped gradually into
1881. When the crisis developed in
OF to 1925 100000. Then the gold
holdings of the Bank of France were
| S2,212, 900 900 and those Of the Bank
of England $793 900 600. Argentina's
gold holdings had declined to approx
mately the same amount as those OF
Germany.
The shrinkage Of Germany's gold
supply went on gradually during 1882.
In December this had dropped to $l92,-
100000, whereas that of the Bank Of
France was up to s3.254 100000, but
decline of $4,000, 900 from the level
! reached in Midsummer of 1881, after
which Great Britain suspended gold
payments. At the end Of last February
the Reichsbank showed gold of $1S3,-
900 900, from which it declined on April
7 to $160,000,000. and is today we'll
under $150,000,000. The total OF gold
and eligible foreign exchange of the
Reichsbank is now approximately $780,
000, 900 and the banks ratio of reserve
| to outstanding circulation is 20 per
cent compared with 258 per cent q
month ago.
The opinion is held in international
banking circles that the payment by
the Reichsbank of the credit of S70.-
! 000, 900 is step in the program OF its
! management which will soon lead to q
reduction in the interest rate on Ger
man dollar bonds. In this connection
some comments that appear IN the an
nual report of one of the large Ger
man banks are Of significance. This
states that to the end of 1882, by m ans
of foreign exchange restrictions, Ger
many has been able to meet the statu-
tory service of her long term debt and
make a small reduction in her short
term debt. This obligation was further
i reduced at the March meeting of the
"standstill' committee. Some modifl-
cation was also made at that time in
the interest rate. The bank report
points out that during the first nine
months of 1882 the Reichsbank gave
additional assistance to foreign cred tors
out of its gold and foreign exche- &c
, reserves but was not able to continue
the policy in the December quarter.
| 1t is estimated that in 1922 totsi p?v-
/ ments by Germany to foreign creditors
|
many's export surplus. plus the reduc-
ton in reserve of the Reichsbank.
Export Surplus.
While the export surplus Of Germany
| in the first half Of 1892 was quite salts
factory and carried over from the sec.
ond half of 1881, 1t was not maintained
| in the final six months Of last year.
Consequently this export surplus re-
Gently has been only sufficient to cover
the interest and sinking funds on Ger
many's long term debt. mainly that
contracted in the United States, and the
! interest on the shcrt term debt.
| The pre-ert fo-eign trcce policy OF
! the German Government is OF a nature
, that does not improve the status of her
, external loans In view OF this. the
present small amount Of gold holdings
and the low cover of notes by gold, 1t
! Is believed there will be some radical
| changes In the coming months In con-
nection with both sinking fund and
| interest payments. The next coupon ON
! the German Government per cent
loan Is payable on Saturday. Funds
| for this have already been transferred
to the paying agents In this country.
tCopyrisht 1933)
/