GERMANY’S TROUBLES

Otago Daily Times, Issue 21385, 13 July 1931, Page 7

GERMANY’S TROUBLES

DIRE FINANCIAL STRAITS PAYMENTS DUE TO BRITAIN SUSPENSION OF TRANSFERS (British Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.) , RUGBY, July 10. A letter has been addressed by the Treasury to the president of the‘Bank of International Settlements stating:— “ The Governments of Britain, Australia. Canada, New Zealand, South Africa, and India have accepted in principle the proposal made by President Hoover. Certain outstanding questions regarding the method of giving effect to President Hoover’s proposal remain to be settled by the Governments concerned. In the meantime the monthly instalment of the German annuity falls due on July 15, but even if the German Government was in a position to transfer this instalment, to demand it would be manifestly inconsistent with the acceptance in principle of President Hoover’s proposal above mentioned. The Governments, therefore, have decided to refrain, in so far as they are concerned, from claiming any payment in respect of instal merits of both the unconditional and conditional annuity falling due on July 15, without prejudice to the rights of the bondholders of the German internal loan of 1924 and the German Government 5J per cent, international loan, 1930, and on the understanding that the terms and conditions of the suspension of this payment and of the eventual transfer of the amount suspended be those agreed upon hereafter for giving effect to President Hoover’s proposal above mentioned.

“The Governments feel it necessary to add that their decision is taken with the object of giving immediate relief to the existing difficulties in Germany in accordance with President Hoover’s pro posal by the complete suspension of transfers, whether in cash or in kind and it must not be understood as implying any derogation from the rights of these Governments under The Hague agreements in so far as any payments may be transferred by Germany.” CREDITS FOR THE REICHSBANK. PRESIDENT’S HOPELESS TASK. BERLIN, July 10. To-day was described as another “ Black Friday ” for Germany. Dr Luther spent the day in a series of conferences in Paris, but it is understood that both there and in London he came away empty-handed from his search t >r £80,000,000 in credits for the Reichsbank. The outflow of foreign exchange continues at the rate of £2,000,000 to £3,000,000 a day. DEBT-SUSPENSION PLAN. THE CONFERENCE OF EXPERTS. (British Official Wireless.) RUGBY, July 10. It is officially announced that the British Government has issued an invitation to France, Italy, Japan, Belgium. and Germany for a meeting of financial experts to consider the measures necessary to give effect to the debt-suspension plan of President Hoover. An invitation has also, been sent to the United States. The .meeting will be held in London on Friday, July 17, at 11 o’clock, under the chairmanship of Sir Frederick Leith Ross, of the British Treasury. WARSHIP CONSTRUCTION. CESSATION OPPOSED. . LONDON, July 11. (Received July 12, at 8 p.m.) The French newspapers unanimously insist that while France would like to assist Germany she must have both financial and political guarantees. The Berlin newspapers are equally unanimous regarding the suggestion that Germany must cease warship construction, which has been met with such a storm of opposition that if it was carried oiit it would probably cause the downfall of the Bruening Cabinet. The Lokal Anzieger protests against Mr Henderson playing France’s game by encouraging her political blackmailing demands in regard to the cessation of warship construction. THE SITUATION DESPERATE. AN APPEAL TO WASHINGTON. BERLIN, July 12. (Received July 13, at 0.15 a.m.) The situation is so grave that it is stated that unless international credit is available before Tuesday doubt is entertained whether the national or private financial situation can be controlled. The outcome of a meeting of the Cabinet, which was adjourned after an enghthours’ sitting, may be a declaration of a mortorium for German private debts, internal and foreign. The discussion will be resumed to-day. It is learned that the amount of credit sought by Dr Luther is £60,000,000. The Government has requested the American Ambassador to cable to Washington appealing for aid from the Federal Reserve Bank, stating that financial collapse is inevitable unless credits are granted with the utmost speed. The bank replied adhering to its decision to participate in a £60,000,000 loan if France takes her share of the credit. Germany cannot accede to France’s demands for the abandonment of the Custom’s Union or the suspension of the construction of the second “ pocket" battleship, therefore unless the Federal Reserve Bank changes its decision momentous events are inevitable. AN APPEAL TO THE POWERS. BERLIN, July 12. (Received July 13, at 0.15 a.m.) The Government has appealed to the United States and other Powers through diplomatic channels, pointing out the urgency of the crisis.