GERMANY'S PLIGHT

Otago Daily Times, Issue 21386, 14 July 1931, Page 7

GERMANY'S PLIGHT

FRENCH CREDIT CONDITIONS CABINET DECLINES TO SUBMIT CRASH PREFERRED TO BLACKMAIL (United Press Association.) (By Electric Telegraph—Copyright.) BERLIN, July 12. The Cabinet decided not to submit to the French conditions for granting credit, at least, so far as the cessation of the construction of the second pocket battleship is concerned and the renunciation of the Austro-German Customs Union. This decision was reached after lengthy Cabinet sessions, one of which lasted for 12 hours, concluding at 3 o’clock in the morning. The second began in the piternoon. The Reparations Committee, the Reichsbank directors, and leading bankers met simultaneously. The bankers were summoned to join the Cabinet’s midnight sitting. Cabinet arrived at its decision owing to the feeling that it is supported by a majority of the Germans, who would rather see their country crash financially than see her submit to what is regarded as blackmail of the worst possible kind, eventually leading to a worse position than ever. It is also believed that France would soon be making fresh absolutely and impossible demands. FRENCH VIEWS UNALTERED BITTER PRESS COMMENT. . PARIS, July 12. Germany’s financial crisis is being watched with critical eyes. The French viewpoint has been in no way softened by Berlin’s panic cries. Le Temps says: “Neither world nor French opinion will sanction further French sacrifices without an assurance that Europe can work in the future with Germany in a condition of peace and security.” The Journal Des Debats, in an editorial which has caused something of a sensation, says: “ Germany shook European confidence by announcing the imminence of a crash. Mr Hoover completely killed confidence by sabotaging the Young Plan, enabling Americans to withdraw enormous sums fijom Germany. Mr Hoover, therefore, is primarily responsible for the situation. All the wealth and power of the United Stales will not prevent us from saying this.” BRITAIN’S DEBT DECISION. WIDESPREAD APPROVAL. (British Official Wireless.) Ji RUGBY, July 12.

The letter addressed by the British Treasury to the Bank of International Settlements announcing the decision of the British Government to refrain from claiming any payments due from Germanly on July 15 under the Young Plan is the subject of favourable comment in the press. The Telegraph says: “A difficult and anxious situation will be eased, not less morally than materially, by the action which the British and dominion Governments have taken in regard to the German reparation payments falling due on Wednesday next.” This expression of relief finds an echo in most of the other comments, where anxiety is apparent lest the-finest curative effect of the Hoover gesture on the depression may be lost in the subsequent difficulties of detail. The hope is expressed that the British lead will be immediately followed by the other creditor Governments. ■ DRIFTING TOWARDS RUIN ANOTHER APPEAL TO POWERS. BERLIN, July 13. (Received July 13, at 8.15 p.m.) With a view to averting a Bourse collapse the directors are closing the stock exchanges in Berlin and elsewhere to-day. Trading in stocks will be forbidden for two days. Public opinion is unanimous that the country cannot accept a political ultimatum because it is driven into a financial claring a moratorium in respect to all private ,debts - in Germany is being discussed by Cabinet, though the matter is likely to be shelved as being virtually a declaration of national bankruptcy. Already the severest restrictions are being enforced on discounting bills. The Reichsbank is submitting each bill to individual scrutiny as the gold and currency cover on Saturday had sunk to 40 per cent., which is the bare limit permitted by the Bank Notes Act. The Hitlerites, who are getting many recruits, are ready to jump at the opportunity presented by the threatened chaos to seize power. Receiving the Ambassadors of the United States, Britain, France, and Italy Dr Curtius addressed another despairing appeal to the Powers to save Germany from ruin. BRITISH POLITICAL ATTITUDE. GERMANY SHOULD MAKE CONCESSIONS. LONDON, July 13. (Received July 13, at 8.25 p.m.) The Morning Post’s diplomatic contributor says; “The attitude in political circles in London is that Germany, being the sole beneficiary of the moratorium, ought to be prepared to signalise her appreciation by offering concessions with a good grace. She would be well advised to postpone the construction of the pocket battleship, as the moratorium will improve her economic position. Germany may well let the Customs union fall into abeyance, as this has been an irritant to the rest of Europe since it was first mooted. “Meanwhile the London Stock Exchange is nervous, and a further fall is likely to-day. Fortunately the Bank of England is very strong, and the gold reserves are higher than at any time in the past three years. Further gold shipments are coming from Australia and elsewhere. UNITED STATES BANKERS. PREPARED TO ASSIST IN RELIEF. WASHINGTON, July 12. (Received July 13, at 8.15 p.m.) An assurance that the United States bankers are prepared to assist in relieving the German economic situation was given to-day by Mr W. R. Castle, Acting-Secretary of the State Department. He said that the leadership was left to the European central banks. BANK SUSPENDS PAYMENT GOVERNMENT FEARS BIG CRASH. BERLIN, July 13. • (Received July 13, at 7 p.m.) The Darmstadter National Bank, one of the biggest in Germany, has suspended payment. The Government informed the bank that it would guarantee all deposits and superintend orderly liquidation. The effect of the suspension of

the Darmstadter is likely to be devastating. The Government fears that a general run on all banks will reresult in the biggest bank crash Germany has known for years. The Darmstadter was heavily involved in the collapse of a North German wool concern, but nobody dreamed that the old-fashioned business, which last year paid 8 per cent., and employed TOGO people, would close. Herr Jacob Goldschmidt, general manager, is regarded as one of Germany’s financial geniuses.