Panic, Peace

On the eve of the successful conclusion of negotiations for a loan to Hungary under the auspices of the League of Nations, the crown descended from about 20,000 to the dollar to 140,000 and was temporarily stabilized at about 85,000.

This--in a land where "suicides of bank directors, speculators and other financial lame ducks have averaged three daily for a week"--created a tremendous panic. Food prices trebled themselves in as many days and the public were considerably agitated by the false reports of speculators.

Leading banks went to the help of the Government with a loan of a million dollars, which went some way toward stilling the storm. A "funded crown"-- an imitation of the German rentenmark ("real value" mark)--was introduced by the Government to enable the money market to remain open in case there should be a further fall in the value of the currency.

The panic definitely subsided after it had become known that League plan of rehabilitating Hungarian finances had been adopted by the Reparations Commission and that W. P. G. Harding had been appointed to control finances through the League of Nations.

When Premier Count Bethlen rose to make the official announcement in Parliament, the greatest enthusiasm was displayed. Count Bethlen said: "I have no definite information, but I know that Mr. Harding is now on the way to Europe and I think on the way to Hungary. . . . Detailed arrangements will have to be made with the League through Lord Cecil when he reaches Paris. . . .

"We are extremely happy to have an American controller, as we know he has no political aims and only the interest of reconstruction at heart. . . ."