WORLD'S GREATEST SWINDLE.

Auckland Star, Volume 55, Issue 2, 3 January 1924, Page 7

WORLD'S GREATEST SWINDLE.

SABOTAGING THE MARK. (From Our Own Correspondent.i SAX FRANCISCO, December 4. Some idea of the gigantic swindle perpetrated upon Americans by Germany may be gauged by a Chicago statement that "the Americans have their hands full of German marks, and the Germans have their pocket-books full of American dollars." This Berlin cabaret parlance is supposed to be funny, but the American visitor to Germany has to return to the United States to realise how many persons —perhaps millions—have been duped by cheap German money. To many it is' more of a tragedy. About 1,000,000,000 dollars of good American gold, it has been estimated by financial experts, have been reduced to about seventy cents' worth of German paper in the past five year?, and there still are persons buying when the rate is as many trillions as it was single marks to the" dollar in 1918. It is well known that Americans are not the only mourners at this funeral of speculative passion. The Copenhagen Landmann's bank failure shows how Denmark was involved, and in Sweden, Holland, Switzerland, even super-patrio-tic France and a score of other countries, many thousands of persons have lost millions buying marks. New York financial circles have been asking who is responsible for the mark collapse and who has the billions of dollars profit? The usual charge is that the German Government has coined foreign gullibility and it is vaguely believed that "Germany" profited. But so far as this charge refers to the German Government, it is true only to a limited extent, according to an opinion offered by New York financiers. They explain that the German Government has no money laid by. It has to buy food cheaply, to keep employment going, to help to ward off Bolshevsim, through mark inflation, and actually the gainers have been two elements, the big industrialists who paid starvation wages and turned their profits into dollars, and the hundreds of thousands of persons, termed "schiebers" or smugglers, who have systematically "shoved" their money abroad. This has l>een done on a scale unprecedented in the world's history and constitutes probably the world's greatest swindle, according, to a statement made in New York by \£r. Irving Bush, presisident of the Chamber of Commerce of New York, who says that it is estimated that the equivalent of 30 billion gold marks or 7,500,000,000 dollars, mostly in cash, has been smuggled into foreign countries or kept there (when the money was due in exchange for goods) since 1918. "And that is why, with a large percentage of the population under-nour-ished, with tuberculosis and rickets increasing among the children, with soup kitchens opening in the public squares and with appeals for the Hoover Relief action, it has always been possible for many thousands of Germans to make Berlin night life as wild as that of any capital of Europe, and perhaps more vicious. Stinnea' Manipulations. '"Practically every German who has good money to spend has it because he has 'schiebed' his money abroad or kept money due him there or bought dollars or pounds while foreigners were buying marks. "First and foremost on the list of those who have profiled by the speculation through which Americans have loss about one billion dollars are Stinnes and his associated industrialists. In fact the Stinnes gathering is generally blamed with sabotaging the mark and being largely responsible for its final and grand collapse. •'Until recently only kind thoughts were entertained" in Germany and abroad for Stinnes. He has 6000 men working for him, and he usually paid them higher wages than his competitors paid their labourers. But at the recent investigation evidence was produced that Stinnes paid better wages because his paper marks cost him almost nothing. "For years the Stinnes and other industrial groups borrowed heavily from the Reichbank—the Government. They got enormous credits at what at first would seem an enormous interest rate. They repaid weeks or months later, making up one dollar's worth of marks borrowed with about ten cents out ot their dollar profits. In the w _ eek3 or months they used the Government money it had fallen to a fraction of its dollar value of the day borrowed, and even if 50 or 100 per cent was paid to the Government in interest for the period of a few weeks the borrowers still mad 3 many hundred per cent profit. So they could afford to give their workinginen a few fractions of a cent more per day in wages. "It was a harvest for the vulture?, for those patriots of Germany fattened on the carcases of national credits."' added Mr. Bush. "Men like Stinnes did not start inflation, but saw where it was heading. They grew wealthy and powerful. "The shadow of Stinnes sit 3 at every council table. It is the greatest danger to the world to-day. Stinnes' power is a danger to the world because : is certain to bring discredit to honest business, leaders." In like manner the smaller industrialists borrowed money from the Government, and in like manner they kept their gold earnings abroad. Thus five years of German speculation and '"schiebing" have absorbed the billions of American and other speculators. Every time an- American bought 100 dollars' worth of marks some German sold 1000 dollars' worth of marks. The Americans remained holding on to worthless paper "the German hold our good dollar*, but uut iv Germany, concluded the New iorn leader of commerce.