Titan v. Titan

In Berlin it is sometimes popularly supposed that the titanic rivals in U. S. finance are J. P. Morgan & Co. and Dillon, Read & Co. Last week, pink-cheeked, socialistic, optimistic Finance Minister Rudolf Hilfer ding found himself short of cash for year-end budget requirements. He hastily sought to arrange an $100,000,000 loan with Dillon, Read & Co. by cable.

For several days the wires hummed merrily about millions. Then suddenly jovial Dr. Hilferding was jerked up short by brusque Dr. Hjalmar Schacht, President of the Reichsbank. A watchman of Germany's cash drawer, Dr. Schacht barked that he would not O.K. the loan. Scareheads in the Berlin press screamed that Dr. Hilferding would have to resign because now his budget would not balance. There were predictions that the Cabinet was due to fall.

Dr. Schacht, having upset the applecart, set about picking up the apples. Within 24 hours he announced that he (i.e., the Reichsbank) would supply the needed cash. The political neck of Optimist Hilferding seemed saved and the whole affair might have passed off as a teapot-tempest, except for the famed Berliner Tageblatt whose editor announced that he possessed the inside story, upset the apples again.

Reminding its readers that J. P. Morgan & Co. will launch the long awaited German Reparations Bonds, soon after the Young Plan comes into effect (TIME, June 10, et seq.), Tageblatt intimated that should Dillon, Read beat their "rivals" to the Stock Exchange with an $100,000,000 German loan, subsequent Morgan pickings from Reparations Bonds might verge upon the loan. According to the "dope" Dr. Schacht was persuaded to obstruct the loan by Seymour Parker Gilbert, whose post as Agent General of Reparations will automatically be abolished when the Young Plan comes into effect. For years Germans have been hearing that Mr. Gilbert will then become a Morgan partner.

In Manhattan, the Herald Tribune, generally the first recipient' of Morgan news for the daily press, broadened and mellowed the Tageblatt story thus: "Confirmation could not be obtained for the report that the German 'D' banks would cover [Dr. S'chacht's] advances to the German government by short term credits to be granted with J. P. Morgan & Co. It was understood that no negotiations for such a-deal had been opened."

Finance Minister Hilferding did not survive this second upset. Over the weekend he resigned, took with him his right hand man, State Secretary Johannes Popitz. President Paul von Hindenburg scratched his grizzled poll, appointed Minister of Economics Paul Moldenhauer to be Temporary. Minister of Finance.

Earlier in the week Dr. Schacht intervened in negotiations by the City of Berlin with Dillon, Read & Co. for a $14,400,000 loan, squashed it. Berlin understands"that the City was about to hire the money from Dillon, Read for 8.6%, that Dr. Schacht offered to supply it from the Reichybank for 7%.

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