Black Week

Day after desperate day last week Dr. Otto Ender, Chancellor of Austria, staved off the fall of his cabinet and strove to avert the grimmest fiscal crisis which his country has faced since her finances were officially stabilized by the League of Nations. There was even talk that Austria might have to place herself under League fiscal tutelage again. Cause of the crisis was the near failure of Osterreichische Kreditanstalt, the great Vienna bank founded 86 years ago by the House of Rothschild. On its board of directors today sit representatives of the Bank of England, Manhattan's Guaranty Trust Co., Schneider & Cie of Paris, M. M. Warburg & Co. of Hamburg, et al.

Because the solidarity of Kreditanstalt is thought to be inseparable from that of Austria herself. Chancellor Ender and Finance Minister Juch have been raising read)'' cash of late by methods peculiar to governments. The last balance sheet of the Austrian National Bank showed an increase in Austrian note circulation of 16% in one week and the discounted bills had increased by some $30,000,000. These emergency measures were taken, admittedly, as a stop-gap means of saving Kreditanstalt until permanent measures could be taken. Day after desperate day frightened depositors swarmed around the threatened institution, talked earnestly with each other and with officials who worked overtime reassuring the public. Every depositor who refused to be reassured got his money, but the currency of Austria had to be inflated to keep Kreditanstalt open and paying out.

To Berlin, to London, to Paris hurried emissaries of Chancellor Ender, pleading for loans and credits. While he waited anxiously in Vienna the Kreditanstalt called every loan they dared. They called, for example, a large loan to one of the historic private banks of Austria, Auspitz, Lieben & Co. Promptly Chairman Stephen Auspitz went out and tried to jump into the Danube, was restrained by friends. His partner, Dr. Ludwig Schiiller, brother of the Austrian economist who negotiates most of Austria's trade treaties, went out and, unrestrained, shot himself beside the Danube. His body toppled in, was swept away by the famed waters, blue in song, dirty in fact. In seven days the Danube carried Dr. Schiiller's body out of Austria, through a portion of Hungary and into Czechoslovakia where it was fished out at Komorn, 99 miles from Vienna.

Since he had not managed to commit suicide, Stephen Auspitz pulled himself together, ordered sold at once for what it will bring his "priceless" collection of Italian paintings, feature of a loan exhibition in London last year. Explaining the bankruptcy of Auspitz, Lieben & Co., officials said that since 1924 they had made three distinct efforts to put the bank on its feet by speculation. They speculated against the French franc, were fooled and lost heavily when Raymond Poincare stabilized and rehabilitated the money of his country. Second they invested in Dutch industrials, lost more. Third they got in on the Wall Street boom, making so much that, even though they lost much in the crash, Wall Street gave them no coup de grace.

To complete Vienna's picture of despair last week the Budapest newsorgan Magyar sag carried a scare story that the general staffs of Czechoslovakia, Jugoslavia and Rumania held a joint secret meeting recently in Bucharest, approved plans for a Czechoslovak invasion of Austria it Austria persists in attempting her plan of Zollvcrein (customs union) with Germany (TIME, March 30 et seq.). That issue is now in cold storage at the World Court, but disarmed Austria shivered at the threat (perhaps mythical) of Czechoslovakia's big army: 125,000 standing; 1,524.000 trained reserves.

In Berlin, perhaps because Zollvcrein is in cold storage and Germany is vexed at that, Chancellor Ender's fiscal emissaries were not warmly received. They had better luck at the B. I. S. (Bank for International Settlements) at Basle, though exactly how much help the B. I. S. offered was not made clear. Best luck of all was in London. There the British House of Rothschild, touched by the plight of Austria's Rothschild-founded Kreditanstalt, spoke to the Bank of England. By the end of the week Austrian newspapers close to Dr. Ender were assuring the public that he had received a cablegram from Governor Montagu Collet Norman of the Bank of England offering support.

At once the Austrian credit situation eased, so potent is even a whisper of Governor Norman's name. When more details were available it was understood that a consortium of British and Continental banks sponsored by the Bank of England would advance $60,000,000 at once to Kreditanstalt and more later. Wonderful!

Not so wonderful--for Austrian bankers learned to their dismay that the consortium demanded, as the price of saving Kreditanstalt, that their $60,000,000 be guaranteed by the Austrian Treasury. A tremendous squawk arose. Prior creditors of Kreditanstalt demanded that the State also guarantee their loans. After conferring with his Cabinet all night haggard Dr. Ender said to correspondents at 2:30 a.m.: "No limit is fixed by a bill which we shall introduce in Parliament today. The State assumes liability for whatever new credit may be required by Kreditanstalt." Pressed about the rights of "old creditors," told that they were supposed to want the State to guarantee $110,000,000 previously advanced to Kreditanstalt, Dr. Ender merely snapped, "A great exaggeration!" Parliament passed the Ender bill.

During the week nearly all securities on the Vienna Stock Exchange declined as well they might; but equally natural was the growing solidarity of Austrian politicians behind Dr. Ender.

Fortnight ago the resignation of the Ender Cabinet was prematurely announced. Foreign Minister Dr. Johann Schober was supposed to have been recalled from Geneva by telephone by Chancellor Ender thus: "Get a plane--fly!" Actually by the time Dr. Schober returned the immediate cause of Cabinet crisis--a Government bill to reduce the salaries of civil servants, which the Nationalists opposed--had been shelved while the greater crisis was met. Rumors that the Cabinet might resign persisted, but actually its strength increased, even the Socialists giving support which they usually withhold.

When a new effort to wreck the Cabinet was made by Dr. Hans Schuerff, who threatened to resign as Minister of Justice, President Wilhelm Miklas of Austria called Dr. Schuerff's bluff, encouraged him to resign, gave his portfolio to Dr. Schober whose august title thus became Vice-Chancellor, Foreign Minister & Minister of Justice.

In harassed Vienna was exhibited last week a 2,200-piece gold & silver service, just completed for King Zog of Albania by the Viennese jewelers Oesterreicher & Co. Twenty artisans toiled for a total of 28,000 hours, fashioning 360 kilograms (793 Ibs.) of silver into gaudy plates and vessels which they gilded with four kilograms of gold.

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