GERMAN CREDITS

Wanganui Chronicle, Volume 74, Issue 196, 20 August 1931, Page 7

GERMAN CREDITS

GRANT AND RENEWAL EXPERTS REiCH DECISION THE INTERNATIONAL BANK (B TeleerapN—Pre«« A-woriation—Copy right.) Received Aug. 19. 5.5 p.m. LONDON, Aug. 18. The meeting at Basle of the banking experts appointed at the request of the Seven Power London Conference by the Bank for International Settlements 11 to inquire into the immediate further credit needs of Germany. and to study the conversion of short-term credits into long-term credits/ 1 adopted Sir Walter Layton’s report m •unimending six months’ prolongation of Germany’s short-term credit of approximately five millia:d marks, on the condition that the central banks of Great Britain, France, and America, ami also the Bank for International Settlements, which has already granted Germany a £20,000,000 credit, are prepared to renew this for six months, commencing from to-day. The report • Iso favours fresh credits to Germany subject to certain conditions. The report of the committee signed by ail members says that Germany’s short-term debt to-day is 7,400,000,000 marks. Short-term credits of 2.900,000.000 marks have been withdrawn in the past seven months. It is evident that German economics will remain under the heaviest pressure until the Reichsbank’s position is relieved and at least a portion of the withdrawn capital replaced. The committee pleads to all Governments for immediate measures to create a situation favourable to Germany, and eventually to the whole World. Only restoration of the free exchange of money and products will dispel the partial paralysis from which the economic organism is suffering. Ger many’s lack of confidence is not justified, but unless it is restored it will be impossible in future to place long-term loans. Germany’s credit alone urges thte improvement of the currency by the compression of imports and the development of export. In a Swiss town on the Rhine, which forms the exact junction of Germany, France, and Switzerland, there is now rounding out its first year of existence the most unusual, most extraordinary, and most interesting bank in the world, writes Leland Stowe in the American Review of Reviews. It is the ‘‘baby bank” of the Young Plan, conceived to keep Gorman reparations out oi politics and international finance out of suspicious and antagonistic countei actions. It is called the Bank of International Settlements, but already it is known by its simp’e abbreviation— ” —or. as frequently, simply “The International Bank.” It may well be called this, for there is no Other. As to its unusualness the International Bank impresses one from the first glance. Consider that on March 31 its total assets exceeded 1,900,000.000 Swiss f ran vs, yet should you attempt to cash a cheque for 5 dollars in the jnodest remodelled former hotel which houses the 8.1.5. you would not be able to do so unless a trusting employee or official handed you the equivalent m Swiss francs, yet should you attempt There is not any money in the headquarters of the International Bank. It owns and controls millions of dollars, It has been shifting these millions all over Europe, to Japan and the United States for almost twelve months, and yet only one ehenue has ever been drawn on the B.T.S*. Even its own employees do not receive th Hr salaries bv cheque or in cash. Thev simply find their salaries added to their ner«onnl accounts in the local bank". The International Bank has no coffers, no vaults, no cashier’s taeo. Monev is the Inst thing it« officials ever see or handle there. Yet in manv wavs it is the most important bank in th** world. Again, this is a bank in which twenty-four countries participate and which handles the currencies and investments nf twenty-seven nations. Its financial dealings extend from Tokio to Nov- York, and mav soon roach intn south America; porhans eventually around the globe. Yet the entire per ponnol of th** bonk which in this way shatters all banking precedents num bers only ninotv-fwo. Ten nationals ties are represented. Two Americans, a German, a Frenchman, an Italian an Englishman, and a Belgian are its principal officials. Bad Beginning. It should be remarked at the outset that the ‘‘baby bank” of Basle—perhaps the most experimental bank, in its amazingly broad possibilities, of my in the world’s history—was born and pushed out into a cruel world when many other banks of fifty ur one hundred years old were dying in half a dozen different countries. The International Bank was born in Paris in June, 1929. Lt was only five months Did when the market crashed in Wall Street. By the time it was released from the cradle last Muy and left to learn how to walk for itself, both Europe and America were in the midst of the most serious economic and finanEial depression since the World War ended. In the midst of these unfavourable circumstances the Young Plan's baby has had to make its way. With this matter of restricted and oncertain financial as well as business conditions in mind, we may consider with more justice, what the International Bank, on the verge of its first anniversary, has accomplished. fur simplicity's sake the bank’s principil activities may be divided into three >»-c tions: (1) Credit activities of all kinds; (2) the bank’s relations to gold movements and the gold problem; (3) handling of reparations. To -these numerous other technical items might be added. . . A Pioneer. After several days passed at the bank in talking with the men who direct it and prying into its record and its objects you would come away, it seems to me, as 1 did —convinced of one thing above all others. It is infinitely more than just a bank. It is exactly what Owen D. Young, Thomas Lamont, Sir Josiah Stamp, and the others intended it to be—a new machine, a new turbine, striving to equip the nations of the twentieth century to carry the swollen load of a civilisation whose complexity is steadily increasing. It is at once a laboratory for international finance and a pioneer in international financial co-operation. As a laboratory it appeals to the specialists, but as a pioneer it appeals to the imagination of the average man.