A FEW weeks ago one of the foremost publicists of France made a statement to a member of the Outlook staff that Germany had received in gold as the result of the sale of the Government’s paper marks abroad more than Germany had paid out in reparations. In other words, Germany was engaged in a very profitable transaction as a result of the war, for she had sold worthless money for more than she had been willing or forced to pay in repair of the wanton damage she had done in her neighbor’s territory. Such an allegation coming from a French source might be answered by the argument that it was an ex-parte statement. Now the New York “World” in a copyright article gives figures based on information from German banks and confirmed by records in America, “checked by a canvass of the big cities of the United States and the scrutiny of eminent, thoroughly experienced banking and foreign exchange specialists” (to use the “World’s” own phrase), which thoroughly uphold that statement of the French publicist. According to the “World’s” article, all the German paper marks in the world are worth to-day, at the current price, about $175,000,000,000; and yet for the paper marks that have been sold in this country alone Americans have paid $960,000,000 in gold.
In the end of course such business as this can only bring distress to the German peoples as well as loss to the “investors;” but it is highly profitable to the German Government and to those speculators who have been getting their rake-off on the multitudinous transactions that have constituted this commerce in virtually worthless paper. So great was the business carried on at one time that the German Government printing-presses were unable to print marks fast enough to supply the demand. On an average, the marks were bought in America at $12 a thousand. Now they are worth less than 70 cents a thousand. The deluded American buyers have got the paper and Germany has received the gold. Most of those who bought these marks were Germans in America or Americans of German descent. This is the way that Germany has got the gold to pay her reparations. In fact, as the “World” article states, in this way the buyers of German marks “have given to Germany more than twice as much gold as Germany has paid in gold in war reparation payments to date, $365,637,000.”
All this does not lessen the suspicion that the German Government has been quite willing to find itself in what to a private business concern would be insolvency.
Source: The Outlook, 11 Oct 1922