The Scandals

All the big and little guns of the German press roared throughout the past week as they spewed forth volleys of lively comment, acrimonious insults, protests and denials in connection with Germany's two inordinate financial sensations.

Ruhr Credits.* The massed artillery of the Socialists bombarded the Government in a vigorous attempt to force it to explain why some hundreds of millions of gold marks had been payed to the Ruhr industrialists during the time of passive resistance to the French occupation, and why this money was paid over to them without the sanction of the Reichstag.

Monarchist batteries replied fiercely that the Socialists knew that the amounts were being paid in 1923 and accused them of seeking to cloud over the Barmat scandal (see under) in which they are hopelessly implicated. Moreover, it was declared that the Government was entitled to make these payments without reference to the Reichstag by virtue of special emergency legislation.

Communiques prophesied that the Government* howitzers would set up their belching chorus of explanation any day, but the day was continually postponed. It was supposed that defense would be offered on the basis that the Government had to indemnify the industrialists for their losses in order to prevent the secession of the Ruhr and Rhineland from Germany. Eventually the Government will ask the Reichstag to give its expost facto agreement to the disbursed credits.

Barmat Scandal. For long it has been the practice of the German Government departments to invest their idle funds. Under the Bauer (Socialist) regime (June, 1919--Mar., 1920), the Ministry of Posts, which always has the largest cash reserves, invested through the firm of Barmat Brothers and other financial agents a large sum. The Government received in return questionable securities.

A few months ago, the Barmat Brothers failed; the Government lost about $15,000,000 and the Prussian State Bank several more millions. The Reichstag and the Prussian Diet formed each a commission to inquire into the affairs of the Barmat Brothers.

The first step to be taken was the arrest of the four brothers Barmat. Preliminary investigations showed that wholesale corruption involving several prominent Socialists had been practiced. Monarchist guns barked their medley of jubilation. The Lokal Anziger printed a letter which clearly revealed the painful fact that ex-Chancellor Bauer had accepted money from the Barmats. The Socialist Party forced Bauer to resign from the Reichstag--but nothing it could do could temper the cracking shrapnel that spat its hate on every side. Dr. Anton Hofle, ex-Minister of Ports, resigned temporarily from the Reichstag and his trial was rumored; for, although he was not accused of profiting financially, it remained a fact that the Barmat transactions were approved by him. Other revelations implicating Socialists were threatened.

--The present (Luther) Government is not directly implicated; but, as the scandal has become a first-rate political fight between the Socialists and the anti-Socialists, as the Government is logically bound to explain its predecessor's actions and as Foreign Minister Stresemann was Chancellor at the time, the present Government is certainly interested.