Bull-by-the-Tail

Adolf Hitler, Germany's would-be Mussolini, regarded the sufferings of his country with greatest glee last week.

"Never in my life," he wrote, "have I been in such high spirits and inwardly so thoroughly at peace, so entirely satisfied as in these days. The eyes of millions of Germans at last have been opened by hard realities to the unimaginable lies and trickeries and deceits of the Marxist swindlers of the nation.

"Therefore I have good reason to be so happy and contented while fear and panic clutch the throats of the press and the party swindlers."

There were few other Germans to share his happiness. For a fortnight the German Government had been in the position of a man with a wild bull by the tail. So far they were safe, but every thought was for that moment when they would have to let go. The Bruening Cabinet still had the bull by the tail last week. They took a firmer grip.

After a dinner in the British Embassy, which in the words of one of the German Ministers "produced much consolation, much good advice and no money," Ramsay MacDonald and Foreign Secretary Arthur Henderson flew back to London to mind their own troubles.

The Bruening Cabinet had another of their interminable series of emergency meetings. By President von Hindenburg's original decree, German banks must reopen fully for business this week. That would be releasing the bull's tail with a vengeance. A new decree was placed on Old Paul's desk, and promptly signed, continuing the partial closure of the banks indefinitely. Foreign exchange can be bought only through the Reichsbank. Penalties for violating the new banking laws include confiscation of property and ten-year jail sentences.

Looking forward to the time when the banks must reopen, the Government announced a $71,000,000 loan to the Dresdner Bank to stave off a threatened run. The loan will be made by buying three-fourths of the bank's outstanding stock. At the same time it was definitely announced that whenever German banks do reopen, that other D bank in distress, the Danat, would reopen too, the Government guaranteeing depositors' funds. Correspondents realized that with the Reichsbank dictating to all German banks, with the Government owning two of the greatest remaining private banks, state capitalism is now a fact in Germany.

Hans Luther, President of the Reichsbank, sent a seven-page cable to the heads of all the important central banks in the world begging a credit truce for Germany. This was the recommendation of the London conference three weeks ago; most international bankers have already agreed to it in principle. Dr. Luther wanted a definite statement that foreign banks would not withdraw for six months credits with German banks and industries outstanding on July 13. Wall Street quibbled.

Finance Minister Hermann Dietrich announced last week that German revenues for the first quarter of 1931 (taxes, customs receipts) are more than $100,000,000 short of the estimate and added: "It is considered almost certain that the current quarter will show a still greater drop." At the same time German papers announced that the German birthrate had dropped below the French birthrate "for the first time in modern history." Editors blamed the Depression.

German businessmen greeted the Ambassador Sackett-President Hoover plan to sell U. S. wheat, cotton, possibly copper in Germany with moderate enthusiasm (see p. 11). Commented the liberal Vossiche Zeitung:

"It is a step toward closer German-American trade relations. This feature is more important than the financial side of the proposition." Businessmen did not fail to see that if German mills can buy U. S. cotton on credit, sell it at home or abroad for cash, that will be as good as a loan.

Two items of good news crept into the German Press: 1) After a week of credit restrictions the Reichsbank boasted a net gain of $23,000,000 in gold reserves and foreign exchange. 2) While the U. S. auto trade struggled through the doldrums, exports of German automobiles for the first five months of 1931 showed considerable increase over the same period of last year.

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