AYesterday, a development in the market value that was as surprising as it was ominous occurred. After the first early New York prices had moved on the basis of 0.00018 cents for a mark, there was an immediate sudden drop to 0.00013 cents; throughout yesterday’s New York trading day, the price remained at this latter level, only changing to 0.000135 cents in after-hours trading. Translated into German figures, this latter mark rate represents a value of no less than 7.4 million marks per dollar. It may be recalled that yesterday’s Frankfurt official note, which independently arose from supply and demand in trade, stated the amount of 5 million marks per dollar had not quite reached, while Berlin had still dictated the Reichsbank the official note of 4.20 million marks – as a continuation of their sham intervention.
All observations of the internationally active German financial circles agree that foreign influences are by no means purely of a commercial nature that this time caused the abrupt fall of the German mark currency, which our material forces proved insufficient to ward off. It has been observed for some time that there has always been a strong demand for foreign exchange from France in western Europe, which has had a highly unfavorable effect on the market rate.
There can hardly be any doubt that French policy, which in the current state of limbo of the Ruhr and reparations crisis is aimed at a rapid collapse of the German defense forces and is trying to use the time still open until the further development of the political crisis for its own benefit, also works in the foreign exchange market. It is obvious that the position of every German government must be made more difficult when its term of office begins and is accompanied by the shattering and destructive upheavals that such currency turbulences must cause in the German economy and in the standard of living of the masses of the population.
The actions to lower the market rate on the international financial centers qualify as maneuvers against any attempt at consolidation in Germany, they are apparently side effects of the political struggle that France is waging to force an end to the Ruhr crisis in the interests of its policy. These conditions cannot be stressed enough. There are attempts at sabotage against the German efforts to put its internal situation in order, attempts at sabotage against the efforts of the environment, insofar as these, correctly recognizing the general danger situation, are striving for a reduction in the state of struggle, which is a burden on Europe and the world economy.
Germany itself is making the most energetic efforts to counteract the misfortune on the foreign exchange market. On August 10, the ban on selling the market abroad came into force; From Germany, the price-depressing market supply in foreign financial centers is at least very limited. If, despite this, the price pressure continues, the influence on the mark may be facilitated by the unfavorable conditions in Germany’s interior, the trading position and the state financial situation.
On the other hand, there is a great strain on all forces to ease the state budget, to slow down inflation and to take the measures with which the recently formed Reich Cabinet has decided to counteract the collapse of the currency. Germany can expect from the healthy judgment and insight of the environment that it will be given the opportunity and time to counteract the unfolding disaster.
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