A PAPER NIGHTMARE

Evening Post, Volume CVII, Issue 18, 22 January 1924, Page 3

A PAPER NIGHTMARE

GERMAN CURRENCY PARADOXES

THE DEMAND FOR PAPER MARKS.

Paper making is now the key industry in Germany, producing the most required article. It is the only industry with no unemployment, declares Dr. Schaffrath (Dresden) in the ■"Manchester Guardian." Quite the contrary; paper factories are .' run in double shifts. Twenty large factories are_ entirely occupied in supplying the Reichsbank, and 72 in all are working for it, converting train-loads of paper into money. And this paper money, by a miracle, seems from the demand for it actually to be the mostdesired in the world. The Reichsbank has literally been beseiged of' late by messengers from banks, industrial companies, and Government authorities, all crying for money. They come with motor-trucks and horse-carts to carry it away. The demand totalled on 26th October nearly three trillions of marks. I fancy that a trillion will be a figure not very familiar to English people Here it is in cyphers: 1,000,000,000,006,C00,----000. I many add, to prevent a misprint, that the figure "1" should have a tail of 18 zeros.

Faced by the tremendous demand for new paper marks, the Reichsbank has declared that it has only small stocks on hand, and that its daily production amounts to but a quarter of a trillion; this output, however, would be doubled within a few days. (What wonderful outlook for paper factories and printing plants '.). Consequently most customers only received a small fraction of the sum demanded. The Reichsbank had first to satisfy the claims of the bureaus which pay the doles of the unemployed. These do not understand a joke, and soon riot. Next, for a similar reason, industry was given, as far as possible, the means for wages payments. Trade, including -the banks, got very little, and the Government authorities next to nothing. The; State employees are regarded as the most patient, suffering without making disagreeable complaints. As a consequence thousands of State employees do not receive their salaries till they are a week overdue. As all available cash is distributed first to the lower" urade, many high officials and their families must now go on short rations. Credit is nowhere given, and even a large banking account is valueless owing to the empty coffers of the banks; this well-known "fact also results in cheques being generally refused. When salaries are paid later on they will have become valueless through the daily doubling and trebling of prices, so that a high State official may to-day receive less than an unemployed workman. Thesp delays and irregularities of wair'es and salary payments and the consequent distress are the main cause of the diminishing efficiency of workers, and particularly of State employees. • . But to return to the question at issue : The prosperity of the paper industry on account of the tremendous waste of its chief product upon bank notes. Owing to the rapid devaluation on the mark, notes are very short lived. In a fortnight most of the' notes become superfluous, prices having risen to such an extent that a note 'of a hundred times higher denomination must replace them. The notes look still brand-new Whey they will no longer buy even the cheapest objects. Yet, by another miracle, their value has grown meanwhile— as raw material!—far above the sum for which they are legal tender. The ragmnn pays at present for German notes up to 1000 marks forty times, and up to 100.000 marks four times their nominal value !