BERLIN’S MARK PANIC

Otago Daily Times, Issue 18444, 4 January 1922, Page 6

BERLIN’S MARK PANIC

BLACK THURSDAY.” A POIGNANT TRAGEDY. Describing money panio which fell upon Germany on December 1, Germany’s “Black Thursday,” a Berlin correspondent wrote on December 5: — Calm has succeeded Thursday’s panic. There was no stock trading on the Bourse on Friday, and the day was spent in counting the casualties. The next so-called full Bourse will take place on Monday, and monetary interest centres on what will happen then. Heavy enforced selling due to clpaed out margins is predicted for Monday. But a fresh buying interest is.’developing, and the panic oan be considered as definitely over. ; The dollar opened yesterday around 185 marks, developed surprising -strength, and rose consistently to the official Reichsbank rate of 204, while subsequent trading during the afternoon saw the mark fall to 205 and 207 to the dollar, a loss of more than 20 points. In fact, speculative Berlin, after an anxious night’s sleep, began; to take with increasing doses of salt, reports about _ a moratorium on credits and loans. This increasing scepticism about immediate and practical reparation relief caused the .mark to go down and the dollar up. BEGIN PROFIT-TAKING. Professional speculators who had sold short both dollars and stocks began profittaking and covering. Business concerns, importers, and industries. who had lost their heads and dumped dollar and other foreign exchange holdings on the market, thinking to cover their requirements later at bargain figures, got nervous and began buying back The badly bitten public, however, touched the dollar speculatively, and with gloves on. A curious feature of the panic is that the provinces haven’t been heard from yet, and financial sharps cannot figure out what will happen until they have been. The provincials have been just as frenzied j speculators as Berliners, only they are necessarily one or two days late with their orders by the time they learn what has happened in Berlin. There Is no such service in Germany os is provided by America’s leased wire brokerage houses. Consequently, the provinces were missed out entirely in Wednesday’s and Thursday’s doings in Berlin. Their orders, stimulated by the panic, are just beginning to filter in, and will not bo carried out till Monday’s stock market. PATHETIC SCENES. Pathetic scenes were witnessed around all • the Berlin banks 'on Friday morning, including hundreds of branches of the four “big D” hanks. They were crowded from opening to closing by customers of all classes, janitors, clerks, business men, retired officers, former bond-holders, and a noticeably large proportion of women, nearly all of whom were victims of the get-rich-quiok fever induced by the catastrophe boom. They congested the banks and stood in lino for hours to see bank officials, to aak anxiously after their wiped-out paper fortunes of two days ago. Particularly the sobbing women could hardly grasp that their paper fortunes had vanished in a day. For the thousands of foolish individuals who - lost their all in what they thought aure-thing speculation, “Black Thursday” was a poignant tragedy. Many Gorman papers learnedly and paternally point out that speculation is never safe, proving the proposition at considerable length and warning the public not to speculate. - NIGHT LIFE SUFFERS. Another curious immediate effect of Black Thursday was that Berlin’s night life suffered a severe blow. The fashionable, expensive, so-called “luxury” restaurants wore' practically deserted. So were most night haunts. Teuton spenders mostly deriving their recent revenues from speculation were cleaned out, and a lightning change from champagne and lobster to beer and sauerkraut was noted. But the fall of dollars and other foreign exchange has sobered many foreign spenders, too, who have been enjoying high living and gay night life at bargain rates. In financial and political circles increasing scepticism about the moratorium, has crystallised into a conviction that in any case Germany will not bo let off from the payment of the January cash reparations instalment unless utter inability is demonstrated at the very last moment; in other words, that Germany must strain every financial and economic muscle to mpet the January obligations. It/ is believed that while England has every interest in not seeing the mark go to pot, England will choose the most tavourabl© moment for extending whatever relief is necessary to Germany, and that this will be the very last moment before the payment due on January 15, when, if absolutely unable to pay, Germany can appeal to the Reparations Commission, which could then dictate any terms to the defaulting Teuton debtor.