GERMAN FINANCE

Manawatu Standard, Volume IV, Issue 222, 20 August 1931, Page 7

GERMAN FINANCE

EXPERT COMMITTEE’S PROPOSALS. AGREEMENT AFTER PROLONGED SESSION. NECESSARY TO RESTORE CONFIDENCE. (United Press Association—By Electric Telegraph.—Copyright.) Received August 20, 8.5 a.m. BASLE, Aug. 19. The report of the International Finance Experts Committee has been signed by all the members. It says that Germany’s short-term debt to-day is 7,400,000,000 marks (£370,000,000), while short-term credits totalling 2,900,000,000 marks (£145,000,000) have been withdrawn during the past seven months. It is evident that German economics must remain under the heaviest pressure until the Reichsbank’s position is relieved and at least a portion of the withdrawn capital is replaced. The committee issues a plea to all Governments for immediate measures to create a situation favourable to Germany and eventually the whole world. Only the restoration of the free exchange of money and products will dispel the partial paralysis from which the economic organism is suffering. Germany’s lack of confidence is not justified, but unless it is restored it will be impossible in future to place long-term loans to Germany’s credit alone.

The report urges an improvement in the ourrency by the compression of imports and the development of exports. Agreement was only reached after a prolonged session. The German delegates secured an adjournment while they consulted the officiols at Berlin, after which they asked for modifications of the experts’ proposals.

The experts refused and announced they would have to notify the Governments that an agreement was impossible. Finally, after midnight had struck the Germans agreed.

RECEPTION IN "WASHINGTON

PRES IDENT UNCOMMUNICATIVE,

Received August 20, 9 a.m. WASHINGTON, Aug. 19,

Administration circles were silent to-day on the report of the committee at Basle, recommending the revision of the whole of the war debts and reparations structure. At White House it was said that President Hoover, after reading the Press reports, was uncommunicative. One high official of the State Department described the report as of “great importance.” He made no further comment.

SATISFACTION IN WALL STREET,

Received August 20, 9 a.m. NEW YORK, Aug. 19. The recommendations have created considerable satisfaction in Wall Street, banking circles being in line with the opinions recently expressed informally by prominent bankers. Tlio committee consists of representatives nominated by the governors of the central banks, and is presided, over by Mr Albert Wiggin, the United States member. The British member of the committee is Sir Walter Layton, a director of the Bank of England. WOOL COMPANY ORGANISED. BERLIN, Aug. 19. The reorganisation of the North German Wool Company has been brought to a successful conclusion.

The question of further credit restriction confronted the Reichsbank at the beginning of July, when the situation was rendered more acute by the failure of the largest textile concern, the Norddeutscho Woilkammerei Bremen, and a new wavo of uneasiness broke over Germany when a bank in the west was known _ to be m difficulties. The lack of liquidity of tho Norddeutscho Woilkammerei had long been known, but only after a complicated inquiry did the fact emerge that with a siiare capital of 75 million marks and open reserves of 22i millions the debts amounted to 240 millions, while tho assets including all tho offspring companies, amounted at most to 140 millions. That meant a loss of practically 200 millions, or, in addition to the loss of the share capital and reserves the failure to meet nearly halt tho credits’ lloiv these immense losses aroso is not" yet clear, but it seems that heavy speculation by the directors is responsible, which, as it was carried on through a Dutch subsidiary with overseas connections, difl not come to the knowledge of the supervisory council.