Magyar külpolitika, 1930 (11. évfolyam, 1-7. szám)

1930 / 3. szám - Bank for International Settlements. European Finance

18 HUNGÁRIA LLOYD August 1930 of the Royal Academy of Music; Dr. Oüo Légrády, Editor iii Chief of (he „Pesti Hírlap"; Dr. Franci? Marschall, M P.; Captain A. F. Merry, Member of the British Legation; Emil Mutschenbacher, Director of the National Agricultural Society; Dr. Emil Nagy, Ex-Minister of Justice; Elemér Preszly, Chief-Sheriff of the County of Pest; Dr. Alexander Raffay, Bishop; Dr. Ladislas Ravasz, Bishop; Dr. Charles Rassay, M. P.; Dr. Francis Ripka, Lord Mayor of Budapest; Paul Sándor, M. P.; Béla Schober, General Director of the Hungárián National Bank; Count Ladislas Somsich, Member of the House of Lords; Dr. Emil Stein, General Manager, Commercial Bank of Pest; Count Victor Széchényi, Chief-Sheriff; Róbert Szurd&y, President of the Hungárián Textilé Association; Gideon Simaházy Tóth, Medical Professor; Joseph Vészi, Editor in Chief of the „Pester Lloyd"; Július Wolfner, Manufaclurer; Arthur Yolland Lriivecsity Professor. The Society which entirely excludes politics írom ils activities, svil] bogin the carrying into effect its extensive programme of work in the course of next autumn, for the preparation of wich a meeting was held a few weeks ago attended by all members of the Society. Bank for International Settlements. y — European Fináncé. — By Phillip Weiss President, Hungárián Commercial Bank of Peslh. The most appalling consequence of the Great War, from the economic point of view, is the breaking up of relatively large economic units into relatively smaller ones; the replacement of the two Great Powers of Central Europe by half a dozen succession States, who all have their own autonomous tariff walls, their own central banks of currenciés, their own credit and marketing policy, and all of whom arc more or less aiming at national selfsuf f iciency. Since the war there is not enough gold in Europe, so that in different countries it is difficult to keep the currency stabilised. As long as the foreign trade balances of certain European countries i rmain adverse to such a serious degree as they are, an efficient co-operation of the central banks will be necessary to secure the stability of the currency in the countries concerned. There is no doubt that as long as the present situation continues trade balances of European countries will remain adverse and their yearly inward accumulation of capital insufficient. Thus Europe cannot forgó the help of American capital, and this means that her indebtedness towards the 1 Fnited Staates will go on increasing for a long time to come. Since tbc war Kurope has only managed to maintain the economic standard of her population by selling herself gradually to America in the form of long-term investment loans and the purchase of bank shares and industrial securities. On the other liand, the instability of American markét conditions might easily bring about serious disturbances in the supply of credit in Europe. The difficult position faced by the Germán Reichsbank in the first quarter of last year was certainly due to no small extent to the sudden withdrawal of short-term credits from Germany, following the unusual fluctuations in the New York Stock Exchange. The exceptionally high rate of interest on „call money" attracted large sums of capital from almost all European countries to Wall Street in the second quarter of Ihe year—an occurence which certainly does not contribute towards the solution of the credit problems of Europe. We have every reason to hope that with the constitution of the new Bank for International Settlements a remedy will be found for all those weaknesses of presént-day fináncé which are only to be explained by the lack of an adequate international organisation. It will replace eonsignments of gold with the balancing of banking accounts, and this change in ilself will relieve the financial world from the uneasiness which is an unavoidable accompaniment to all great international transfers of gold. Another beneficial resulf of the new International Bank will be that it will tend to equalise the conditions by which loans are offered to capitalimporting countries by taking on itself part of the risk connected with such transactions. The idea was inherent in the Report of the Experts that the new Bank should act as a sort of Investment Trust to lenders of capital, centralising in its own hands the supply of capital to borrowing countries. Up to the present Central European countries have been at a serious disadvantage in receiving credit because they have had to pay considerable premiums on risk (amounting to 3% or 4%) on account of the unsettled condition of Reparations, the instability of currencies to State Budgets, or sometimes only on The Slatue of Washington in the City Park, on Uh o/ Juíj/. Liberty Day of the United States of America.