SShould the collapse of the market go on without end and without us even attempting to resist? The question is addressed to Dr. Wirth, the Reich Chancellor, to Dr. Hermes, the Reich Minister of Finance, and to Herr Havenstein, the President of the Reichsbank. The latter especially. Because it is now time to remember that according to the law the Reichsbank “has the task of regulating the circulation of money throughout the Reich”, and that it is therefore primarily responsible for the care and responsibility for the currency.
The Presidium of the Reichsbank, until recently “under the supervision and direction of the Reich”, was released from this direction by the Reich Chancellor on the not exactly well thought-out order of the Entente, and only supervision remained; The President of the Reichsbank now acts with “judicial independence”; he is the most autonomous position in German economic management today. Such right obliges. And fate pushes.
The German mark has experienced a new rapid devaluation in the last few days, the worst we have ever experienced. The dollar rate, which in the first half of 1921 was roughly stable at around 62 to 65 marks, only to rise to around 190 marks in the second half of 1921 (with temporary fluctuations of up to 300 marks) and then the failure of the Genoese hopes and under the influence of the ongoing reparations payments up to the end of June 1922 to a maximum of 375 marks is almost fifteen times higher today than at the beginning of this year.
Dictates of Versailles and London
In the last three weeks alone, after a rapid temporary recovery of the mark, the rate of foreign exchange has almost doubled: after unheard-of fluctuations, the mark is now lower than ever, exactly where the Austrian crown was at the beginning of November 1921, eleven months ago . Within a few months and weeks, this is a crash that is terrible. Is there really nothing else than idly watching the horrific spectacle unfolding before our eyes with fatalistic devotion?
It is perfectly clear and beyond any doubt that a cure that promises to last cannot be set in motion by Germany alone today. Because this requires a new regulation of reparations, which would give the outside world confidence again that Germany should not be smothered by the victors, who are its creditors – so this requires a reduction in the burden of war reparations to the limit of the real German ability to pay granting a breathing space of several years through a complete moratorium is helping people to help themselves through a foreign credit campaign, which would buy us time for internal economic recovery.
Such new orders from outside would not absolve us from the duty of our own utmost effort; On the contrary, spartan work and life would be our duty now and then, in order to increase our production, increase our exports, and organize our internal state finances through tax payments. But the revision of the reparations burden is an indispensable prerequisite; without them there is no lasting order. There is unanimity about this, not only in Germany itself, by the way, but also among all economic experts abroad and far beyond even among very large parts of public opinion in the world. The only problem is how long it will take for this realization to gain political power and assert itself.
But the question we are faced with today is: What should we do until the dictates of Versailles and London are revised, until the external reorganization actually comes about? Until then, should we sit back and, at best, fill the world with German lamentations, which are hardly as interesting to them as we would like them to be? Or do we not have to act the other way around with all the desperate determination of those struggling for their lives, and accordingly also act with desperate means, like the captain of a ship in distress, who even throws the lifeboats overboard as ballast to keep the naked ship in the water to bring port?
