EUROPEAN CRISIS.

New Zealand Herald, Volume LXVIII, Issue 20923, 13 July 1931, Page 9

EUROPEAN CRISIS.

GRAVE SITUATION. GERMAN GREDIT WEAK. FEAR OF A COLLAPSE. * •' iLOAN OF £60,000,000 SOUGHT OVERTURES TO AMERICA. By Telegraph—Press Association—Copyright. (Received July 'l2. 7.45 p.m.) •BERLIN, Julv 12 The situation is so grave that it is stated that unless international credit is available before Tuesday, doubt is entertained whether the national and private financial situation can be controlled. The outcome of a meeting of the Cabinet, which was adjourned until tomorrow after sitting for eight hours, may be the declaration of a moratorium for German private debts, both internal and foreign.

It is learned that the amount of credit sought by Dr. Luther, president of the Heichsbank, is £60,000,000. The Government requested the American Ambassador, Mr. F. M. Sackett, to send a cablegram to Washington, appealing for aid from the Federal Reserve Bank, and stating that a financial collapse Tvas inevitable unless credits are granted vritk the utmost speed. The bank replied adhering to its decision to share in a loan of £60,000,000 if France took a share in granting credit.

Germany cannot accede to France's demands for the abandonment of the proposed customs union with Austria, or the. suspension of the construction of a second "pocket" battleship. Therefore, unless the Federal Reserve Bank changes its decision, momentous gvents are inevitable.

'APPEAL TO POWERS.

URGENCY OF SITUATION. DIPLOMATIC ACTION. (Received July 12. 11.45 p.m.) BERLIN, July 12. The German Government has issued an tppeal to the United States and the other Powers, through diplomatic channels, in which it points out the urgency of the financial crisis. REACTION IN BRITAIN. LOWER BANK RATE DEFERRED STOCK MARKETS DEPRESSED. (Received July 12, 5.5 p.m.) LONDON, July 11. The confident hopes entertained a fortnight ago of an early reduction in the bank rate have not been fulfilled, for "although" the French Chamber of.Deputies has agreed to Mr. Hoover's moratorium proposal, Germany's financial troubles have become so .acute that the Bank of England had no option but to act cautiously, and to postpone the much desired reduction until the situation in Germany improves. vThe bank's position is extraordinarily itrong. . Its gold reserve is nearly £166,000,000, ; and farther sums are in eight,.which are likely to raise it to the high record total of £175,000,000 before the autumn.

•The failure to reduce the bank rate had a depressing effect on the Stock Exchange, which counteracted the good impression caused by the moratorium arrangement. The depression was accentuated by the German financial crisis, and by alarmist reports that it might seriously affect some of the London houses engaged in Continental finance. Consequently gilt-edged' British securities had' a slight setback, but Australian stocks maintained their position, " on the continued progress made toward financial reconstruction," as the Statist puts it. Dominion stocks generally are firm.

iWOOL PRICES SUFEER.

REVIEW OF POSITION.

STRIKES IN INDUSTRY.

(Received July 12, 7.5 p.m.) LONDON, July 11.

The representative of the Australian Wool Council, Mr. W. P. Devereux, says •n his report on wool that, although the French Government's acceptance of Mr. .Hoover's war debt proposals was known prior to the opening of the wool sales, the benefit arising from the moratorium was largely counteracted by the protracted nature of the negotiations and the consequent increasingly difficult financial position of Germany, together with the partial continuance of the textile strike in France and the possibilities of labour troubles in Yorkshire.

The position was not improved by the announcement of the losses of the North German Spinning Company and its subsidiary concerns, which are infinitely greater than was disclosed in the balancesheet of December 31, 1930. Under all the circumstances the opening decline in values at the sales is generally considered less unfavourable than Wight have been expected-. Since the opening the competition, although still largely dominated by Yorkshire, has rather and now includes some do Wand by both French and German buyers. »alues show little or no change compared with the" opening rates.