COLLAPSE OF EXCHANGES

Otago Witness, Issue 3566, 18 July 1922, Page 19

COLLAPSE OF EXCHANGES

AUSTRIA’S POSITION ALARMING. NOTE TO REPARATIONS COMMISSION. LONDON, July 8. An alarming story regarding the state of Austria is contained in a Note addressed by the Austrian Government to the Reparations Commission seeking relief from liens on certain revenues possessed by the creditor nations. The Note states: Unless relief is allowed immediately, a financial catastrophe will be inevitable. The crisis was never so acute. It is far more menacing than any preceding one. The Austrian crown has shrunk from 50,000 to the pound stering to 100,000, and it will soon be utterly valueless, and will be refused by every bank in the world. This would lead not only to a financial crisis, but to a social upheaval and a political collapse. If the neighbouring countries send troops to restore order international jealousies and the possibility of a conflict will be aroused. PARIS, July 9. The Austrian Note greatlv impressed the French, and has thrown the Reparations Commission into a state akin to consternation. QUESTION OF REPARATIONS. LONDON, July 10. The Daily News’s Paris correspondent expresses grave concern regarding the German financial situation and its effect on France, whose own recent depreciation added nine milliards of francs to the national debt. Further, it is realised that not only Germany’s cash payments will be involved unless something is done to remedy the German currency. Reparations in kind will soon be as uncertain as cash. Berlin’s declaration that it is impossible to continue the monthly deliveries of coal to the Allies is regarded as significant of tliis. OFFICIAL CIRCLES ANXIOUS. LONDON, July 10. Official circles are gravely anxious regarding the German financial crisis. The Cabinet will consider the situation to-morrow. It is reported that Mr Lloyd George informed the United States that the position is most dangerous. The early assembling of the Supreme Council or the Allied Finance Ministers and experts is regarded as imminent. Tlie latest drop in the market is not yet fully explained. The German purchases of foreign securities for the July reparation payment, together with speculation, are regarded as insufficient reasons, especially as the Wirth Government weathered the storm caused by the murder of Herr Rathenau and the Monarchist reaction. If France can be persuaded to forgo her earlier objections, the International Bankers’ Committee, armed with full powers, may be asked to reconsider the loan question.

Two schools of thought are forming. One, which fears a Red revolution in Germany, desires to assist Germany, while the other believes that the situation cannot be finally relieved till she has passed through national insolvency. There is considerable press opposition to British money going to help Germany. DELIBER ’Tk ENGINEERING "RRFD. BERLIN, July 10. The Freiheit suggests that the cause of the collapse of the mark is internal, and not external, inferring that it has been deliberately engineered by reactionary German capitalists, who have purposely kept foreign currency out of the market. It points out that quotations in Germany are consistently worse than they are abroad, and recalls significantly the converse case of how during the Kapp-Putech regime while the Kappists were in power the mark was driven up bv some unknown agency, though it fell with Kapp’s failure. STATEMENT BY MR LLOYD GEORGE LONDON, July 10. The Prime Minister, in the House of Commons, said that it was undesirable to deal with Reparations, in answer to Parliamentary questions. He said that there might be a development during the next few days which would render a statement desirable. Up to the present the Germans had not even paid instalments which would cover the cost of the actual damage to Belgium and France. . July 11. The Westminster Gazette states tnat the British Government anticipates the early complete financial collapse of Austria, and fears that if Germany increases taxation and ceases to print paper money, which is the only way to stabilise the currency, the present Government will fall and be replaced by an autocratic administration. RECKLESS ISSUE OF PAPER MONEY LONDON, July 14. The Daily Mail’s correspondent m Berlin reports that the reckless printing of paper money continues The weekly report of the Reiehsbank announces a further increase of nearly 4,000,000,000 marks, bringing the total to 183,000,000,000 marks. This weekly printing of money ia an easy way of providing for the payment of weekly bills, but it is incompatible with sane finance. Every new issue pushes the mark further downward. The Daily Mail editorially states that it is pleased to observe that the Commission was not hoodwinked by Germany’s plea. It is Germany’s methods and "not the Allied demands that are to blame for the total of tho German national debt. The British currency is £159,000,000, as against the Germans £7,800,000,000, yet Germany says that she cannot find £2,500.000 per month, whereas we have to find £4,000,000 for interest on our debt to the United States.—A. and N.Z. Cable.