Banking circles in London and other centres view events in Germany with growing concern, the “Financial News” writes in an editorial. It is feared that the political developments, of which Germany has been lately the scene, may affect adversely the position of her foreign creditors. The intolerance of the new regime towards certain sections of the population—Communists and Jews in particular—is likely to affect adversely the financial position of the country. It appears that the Soviet Government is already retaliating for persecution of German Communists by diverting its purchases from Germany to other countries. In one instance a substantial order has just been diverted from Germany to Belgium.
Political considerations have always played a prominent part in influencing the trend of the import trade of Soviet Russia. For the present, the position of the Soviet Government in relation to Germany is particularly strong, because owing to the large amount of its indebtedness to German exporters, the German Government would only hurt German interests if it retaliated by excluding Russian goods.
The anti-Jewish movement also threatens the security of Germany’s external credits. A large number of business firms owing money abroad are controlled by Jews, and if their businesses are ruined through boycott or personal persecutions the foreign creditors are bound to suffer.
DANGER TO THE BANKS
Should the rule governing exclusions of Jews from the civil service and the professions be applied to those employed more thoroughly than it has been in banks, many more of the ablest German-Jewish bankers might be removed, which certainly would not improve the banks’ chances of weathering the immense difficulties confronting them.
Apart from this, a large number of Jewish clients, big and small, of the German banks may be ruined, thereby increasing the bad debts of the banks.
Moreover, the persecutions are resulting in the emigration of a number of wealthy Jews, who will doubtless find ways of circumventing exchange restrictions. This, together with the adverse effect of the Russian attitude upon the trade balance, may weaken the reserve position of the Reichsbank. In a number of cases Jews have sold their businesses abroad with the proviso that the purchase money be kept for them there.
FEAR DEBT CAN’T BE PAID
Though undue pessimism is not called for, it is advisable, therefore, for the creditors of Germany to envisage the possibility of a change for the worse in their situation, unless the German authorities are able and willing to moderate the intolerance of their adherents.
The City Editor of the “Daily Mail” also commented on the situation. The position both in Germany and Austria is continuing to cause financial as well as political anxiety, he writes. The question of Germany’s ability to continue meeting the cost of her external debt is again being raised.
A few months back, Dr. Luther, the new Ambassador to the United States, then president of the Reichs-bank, drew attention to the declining figures of Germany’s surplus of exports over imports. He then estimated that a monthly surplus of 80,000,000 marks in Germany’s favor was necessary to enable her to meet her foreign obligations.
In January and February of this year this surplus had fallen to about one-quarter of this figure, and it is feared that a further reduction will have been suffered during March.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
