Unfortunately, the first half of May brought a new deterioration to the foreign exchange market. The dollar has risen from 30,000 to 49,000 marks and the English pound from 138,000 to 225,000 marks – and steadily. The Reichsbank was only able to counter the sharpest swings in the pendulum; moreover, it gave free rein to the thawed driving forces by regularly giving as much as was charged at rising prices.

To the surprise of outsiders, the use of the gold part deposited with foreign central banks, which had begun by pledging and probably also by sale, did not take place with the speed and reach that could generally be expected at the very moment of the submission of the German reparations offer. One of the counter-reasons is obvious: the German note seemed to have been rejected in advance by foreign countries, and thus the lightning-like, politically favorable repercussions on the mood of German business circles and on the mood of foreign Reichsmark dealers and credit holders were thwarted.

In the previous months, however, it was already clear that politicians, and only politicians, could still keep the currency level under pressure. Even if the possibility of further spinning the diplomatic threads, our credit abroad has deteriorated to such an extent since the whole world knows the undiminished severity of the enemy's reparations demands and can compare them with our ability to pay, that the possibility of artificially keeping the foreign exchange balance below a certain, natural level had to be doubted. So they have started to hold on to the borrowed reserves again, all the more so because they owe their creation and replenishment to the tackling of the penultimate half billion gold billion. So far, as mentioned above, this approach has been relatively small and it seems that the intention, especially since a final reparations exchange and the dollar treasury issue is still on the table, to continue to take this refuge only gradually and hesitantly.

Strictly speaking, the last (May) bill of exchange was already paid for by the Reichsbank gold. The enactment of the new foreign exchange regulations was not accompanied by any visible effect, i.e. the falsity of the allegations before a great over-speculation was probably quite proven. Of course, a state authority that is inhibited in its most sensitive part of the country will always find it difficult to enforce economic regulations evenly. However, the sensible circles of both the occupied and the unoccupied territories must always be hoped anew that they will look at the whole and not make the special and immediate needs of the mood in the field of foreign exchange the guideline. The right of confiscation is certainly not intended to drive foreign currency, which is indispensable, to opponents, but the detention of expendable people should not be sanctioned either.

Immediately reinvest in raw materials containing foreign currency

Readers' protests against our recent remarks show that the idea of self-restraint, a curtailment of the private industries, a reduction in job opportunities, in short, the idea of having to get through an industrial and commercial crisis, has not yet gained much ground. It may be that for some, as long as there is no external support for the financial order, every sacrifice seems in vain. But there can be no doubt about this: the more the private sector now lets itself go, the more it continues to pulsate in the comfortable slumber at inflationary expense, that is, at state expense, the worse the setback would be, the more severe the lack of working capital would appear afterwards when the production of banknotes is cut off and when it comes to the restructuring of the state.

The question of foreign exchange has gradually emancipated itself from the Ruhr question. Initially, the maintenance of resistance in the West was considered inseparable from the avoidance of price, wage and foreign exchange bull markets, but this axiom apparently had to be abandoned. With a month-long duration of the policy of perseverance, after the increase in the pending debt from 1.6 trillion to 8 trillion and the circulation of slips of paper from 1.3 to 6.5 trillion marks, the causal relationship has become overpowering. The pressure on banknotes and, above all, the increase in scriptural money revived business activity everywhere as soon as exchange rates suddenly jumped under the oft-discussed impulses of April.