CRISIS IN GERMANY.

New Zealand Herald, Volume LXVIII, Issue 20925, 15 July 1931, Page 11

CRISIS IN GERMANY.

-*• GOOD NEWS FROM BASLE. BANKS TO GIVE AID. renewal of credit. FEELING OF OPTIMISM. . MUCH RELIEF IN BERLIN. By Telegraph—Press Association—Copyright. (Received July 14, 9.35 p.m.) LONDON, July 14. The governors of the Bank for Inter'v national Settlements had a conference at Basle yesterday with the president of the Reich shank, Dr. Luther. A message from Basle states that the council of the Bank for International Settlements has sent a communique to the German Government stating that it is ready to collaborate with the other banks with a view to financial action, and is prepared to reinforeo by all the means at its disposal the action of the central banks. Meanwhile the. council has authorised a renewal of the participation by the bank in the rediscount of credits pre-viously-accorded to the Rcichsbank. The anxiety in (lie capitals of Europe, particularly Berlin has been relieved by the news of \lie momentous decision made by (he Bank for International Settlements. which lias resulted in a wave of optimism and relief that Germany's troubles will within a few days bo over. The bank's decision regarding rediscount „V - 0 f credits means a. renewal for three months, of the expiring short-term credit of £20,000,000. CONCERN IN LONDON. FALL IN THE MARK. GERMAN BANKS SOUND. British Wireless. RUGBY. July in. The grave financial crisis which has developed in . Germany is being followed with deep concern in Britain. To-day's events in Berlin caused the inevitable repercussion on the London foreign exchanges. There was severe depreciation of the German mark, which after slumping from 20.65 to 27 to the pound recovered in the afternoon. The German crisis had - a weakening effect on the stock exchange generally. Prices after recovering from an ' early drop presented a weak appearance at the close of the market. News was awaited amfiously* throughout the day of the result of the conference of the Governors ;' of 'the Bank for International Settlements at Basle. ]n London the importance of the proceedings at Basic for re-establishing German credit is fully recognised. The Prime Minister, Mi. Mac Donald, answering a question in the House of Commons regarding the" meeting of Treasury experts to consider the measures necessary to ' give effect to Mr. Hoover's proposal, said it was impossible without notice to give any later news as to the week-end liappeniiigs regarding credits for Germany, •j - Messages from Berlin this evening stale that all the big banks apart from the Darmstadt and , National Bank are in 'a perfectly sound position, and require no 'Government guarantee. . '(A message from Amsterdam states that the market is free from panic, in the belief that the conference- at Basle wilt result in the support of Germany over the crisis. OFFER 0E COMPROMISE. DR. LUTHER AT BASLE. i ■ BANKS SUSPEND PAYMENT. BERLIN. July 13. All eyes are turned to Basle to-night. German financiers believe that everything depends on Dr. Luther's efforts to secure substantial credits.' It is j believed that if he fails to secure support by Wednesday, when the » stock exchanges will be reopened, a general ''moratorium must be declared. It is reported in Berlin and Paris that Dr. Luther has taken to Basle a compromise proposal regarding the French political demands. This it is believed applies to the proposed Austjo-German customs union, but not to the naval programme. Following on the suspension of payment by the Darmstadt and National Bank several of their subsidiaries, as well as one of the largest provincial banks in Dusseldorf and municipal banks in other cities, have, followed suit. A message frorn Paris says the Paris newspapers continue to show no sympathy wii.ii Germany. Most of them strongly criticise the Reichs policy as being primarily responsible for the catastrophe. , • APPEAL TO PEOPLE. BRITISH CAPITAL LOST. DRASTIC ACTION BY BANKS. BERLIN. July 13. The German Government has issued a ; . manifesto appealing to the nation to keep its nerve in the present serious situation, and not to increase the difficulties by lack of self-confidence. ■ The total liabilities of the Darmstadt and National Bank are £75.000,000. Large forces of police controlled the crowds outside the banks. The populace aro stunned Ht the closing of the Darmstacdter concern, notwithstanding that the Government is guaranteeing its deposits. It is believed that between £8,000,000 «"d £9,000.000 of British capital is involved. Owing to the Reichsbank's inability to meet their full requirements the* German ■ • . hanks hive taken the drastic action of not cashing their customers' cheques above a certain aiftount, varpiilg accordto the bank. In some cases no cheques above £5 .ire being cashed. EFFECT ON STOCKS. FALL IN NEW YORK. NEW YORK, July 13. -Although the German crisis gave the Kp.w.York stock market a flurry in the .. v early trading to-day, prices rallied slug- - R«hly during the ensuing hours and .. i closed with moderate net declines. ,