April 1921

APRIL, 1921. FEDERAL RESERVE BULLETIN. 429

Weekly cost of food per person in Berlin—Continued. German financial situation. [Amounts in millions of marks.] Per cent of increase, Reiehsbank statistics. In over marks. July- August, Reserve. Darlehns- 1919. kassen- scheine in Reichs- Note circula- 1920. circu- Deposits. tion. und lation. January 62 80 136 53 Gold. Darlehns- February.. 63.04 137.44 kassen- March 67 74 155.14 scheine. April 71.43 169.04 Mav 70 12 164.11 June 67.76 155.22 1913 average 1,068 32 1,958 668 July 62.35 134.84 1920, end of— August 57 20 115.44 April 1,092 15,193 47,940 16,499 13,776 September 57.48 116.50 May 1,092 15,907 50,017 17,024 13,567 October... 59 90 125.61 Juiie 1,092 17,252 53,975 23,414 13,633 November 60.25 126.93 July 1,092 17,874 55,969 17,282 13,328 Pecember. 61.49 131.60 August 1,092 18,686 58,401 15,772 13,266 September... 1,092 19,861 61,735 20,054 13,348 1921. October 1,092 21,340 63,596 17,945 13,024 January November... 1,092 20,363 64,284 17,340 12,370 61.23 130.62 December... 1,092 23,417 68,806 22,327 12,033 1921, end of— January 1,092 22,810 66,621 15,834 11,341 According to figures recently published, February 1,092 21,982 67,427 17,357 110,755 German coal production was almost 12 per cent larger in 1920 than in 1919, but it re- Situation of the Government. mained almost 25 per cent less than in 1913, Receipts leaving the Saare, the Palatinate, and Alsace- from Lorraine out of the matter entirely. The fol- taxes andj 3 per cent 5 per cent Govern- Floating imperial war lowing table illustrates the trend of production ment debt loan.2 loan.2 monop- in the last three years as compared with 1913. olies. German coal production. 1913 average 265 75.90 [Without the Saare, Palatinate, or Alsace-Lorraine.] 1920, end of— April 2,072 74.50 98.75 May 2,599 67.50 98.70 3,227 141,987 Per cent June 62.90 98.30 In July 3,739 148,750 60.64 98.50 millions of the August 3,635 60.80 98.70 of 1913 pro- September. 4,126 156,825 62.25 99.90 tons. duction. October 5,121 161,920 66.25 99.00 November. 6,130 165,918 68.60 98.75 December.. 9,103 65.75 98.90 1913 173.62 100 1921, end of— 1917 154.41 88.9 January 8,721 67.00 99.50 1918 148.19 85.4 February.. 67.25 99.75 1919 117.69 67.8 1920 131.35 75.7 i Provisional. 2 Quotations of the Berlin Bourse.

Coal production of the Ruhr in 1920 SWEDEN. amounted to 88,000,000 tons, and of Upper Silesia to almost 32,000,000 tons. The latter During February wholesale prices dropped figure illustrates the importance to Germany approximately 6^ per cent and were nearly of the ultimate decision in regard to that one-third less than the peak prices of June, territory. 1920. The greatest downward shifts occurred The lieichsbank statement for February 28 in raw materials for agriculture, metals, animal shows an increase in the holdings of " other food, hides, and textiles. Although coal metal" from 6,377,000 marks at the end of showed only a slight falling off in February, it January to 7,974,000 marks at the end of exhibited the most drastic drop during the February. Deposits also increased during the preceding months, having declined 71 per cent month, and the note circulation of the bank, from its highest level in July. The textile after declining in the first two weeks of the index has receded about 61 per cent from its month, reached a high level for the year. The peak; hides and leather, 60 per cent; metals, most important decrease in the end of February 37 per cent; wood pulp, 35 per cent; animal statement is that in the Loan Bank notes held foods and raw agricultural materials, 23 per as reserve which declined almost 1,000,000,000 cent; building materials, 18 per cent; vegetable marks. The following table gives a brief foods; 15 per cent; and the oil group, only about survey of the situation. 6| per cent.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis October 1921

1194 FEDERAL KESEEVE BULLETIN. OCTOBER, 1921.

tion of German currency in foreign markets No decision has yet been reached in regard was due partly to buying of grain and cotton to the method by which the revenue needed and partly to the reparations payment to the for Government expenses and payments on allies. reparations account shall be raised. During The payment of 1,000,000,000 gold marks on August a whole series of new taxes which reparations account was not accomplished would involve very considerable sacrifices without drawing heavily upon the resources on the part of German taxpayers were pro- of the Reichsbank. In the first place a large posed for the consideration of the Reichstag, amount of the silver, which the bank has held and some action upon further taxation prob- in a special account since the demonitization ably will be taken in the near future. of silver in Germany, was used to establish Speculation in both securities and commod- credit balances in New York, where it yielded ities has continued as a result of the recent about 50,000,000 gold marks, and in the second fluctuations in exchange rates. The Frank- place it was necessary to draw upon the gold furter Zeitung index for 25 stocks went to 239 reserve of the bank to the extent of almost on September 14, and its index number of 68,000,000 gold marks. The Reichsbank has wholesale prices rose to 1,777 on September 3. held between 1,090,000,000 and 1,092,000,000 The most important price increases took place gold marks since early in 1920, but the recent in the case of hops, potash, kainite, milk, lentils, payment so reduced the reserve that it stood peas, hay, tobacco, rolled plates, bar iron, steel at 1,023,708,000 gold marks on August 31. scrap, twine, linen yarn, and raw cotton. These inroads upon the resources of the There has been a definite increase in the price Reichsbank were necessary in spite of the fact of iron products in Germany in the last month that the Government had been making every or two. Prices of most iron products at the effort to increase its stock of gold for some time beginning of September equal or exceed the before the payments came due, by buying, rates fixed by the Eisenwirtschaftsbund last through the, Reichsbank and the post offices, May just before price fixing was abandoned, gold coins and gold by weight at special prices, although prices have gone much lower in the corresponding roughly to the value of the paper interim. mark in world markets. The Frankfurter According to the Prussian Chamber of Com- Zeitung publishes the following table, giving merce the increase of industrial activity in the prices which have prevailed since the 1st August again emphasized the fact that German of June: industries are undersupplied with coal. The GOVERNMENT PURCHASE PRICES. quantity of coal to be delivered to the allies by [In paper marks.] Germany is now being fixed by the Reparations Commission month by month. The totals Forl Forl 20-mark kilogram vary from 1,600,000 tons to 2,200,000 tons. gold fine In July, however, only 1,390,000 tons were piece. gold. delivered because France did not require all 1921. the coal and lignite to which she is entitled. June 1-11 260 37,000 The following table gives coal, lignite, and coke June 12-25 280 40,000 June 26-July 3 300 42,500 production in Germany in the first seven July 3-10 310 43,500 July 11-31 320 44,600 months of 1920 and 1921: Aug. 1-8 340 47,600 GERMAN COAL PRODUCTION.1

The prewar price of one kilogram of fine [In thousands of metric tons.] gold was 2,789 marks. According to this same paper these purchases of gold in the Coal. Lignite. Coke. open market brought in about 15,000,000 gold marks. 1920 1921 1920 1921 1920' 1921 The problem of further payments on repara- tions account is very much complicated by the January ] 10,329 12,009 8,643 10,071 1,925 2,350 February j 10,225 12,009 8,464 10,039 1,916 2,277 recent decline in the exchange value of the March i 10,150 11,460 7,920 9,876 1,871 2,442 mark. On the other hand, the agreement April ' 10,011 2 8,985 8,900 210,373 1,775 2 2,150 May 10,167 2 7,797 8,705 29,368 2,070 2 2,154 recently concluded in regard to German co- June ! 11,008 *8,688 9,572 210,055 2,075 2 2,086 operation in the rebuilding of the devastated July j 11,509 10,731 9,235 10,065 2,221 2,218

regions in France should help in solving the 1 Not including the Saar or the Palatinate. problem of future payments to France, at least. 2 Not including Upper Silesia.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis