The London money market, too, has hardly stood the war test. On July 30
the Bank of England was obliged to raise its rate of discount from 3 to
4 per cent., several days later to 8 per cent., and again after a few
days to the incredible rate of 10 per cent. In contrast to this the
President of the German Reichsbank was able, on the 1st of August, to
declare that the directorate, because of the strength of the Reichsbank
and the solid constitution of the German money market, did not consider
it necessary to follow England's example. The German Reichsbank has
therefore not exceeded the rate of 6 per cent. Worse yet was the fact
that England, on Aug. 2, was obliged to require grace on exchange, and
France, on Aug. 3, grace on its accounts-current and Lombard loans.
Although along with England and France, also Russia, Austria, Italy,
Belgium, and other nations required temporary credit, Germany
to date has not deemed it necessary to ask for time in meeting its
obligations. Savings banks, other banks and financial institutions are
meeting all demands without restriction. The fact that the English money
market, which up to the present time has been considered the financial
centre of international trade, has failed, will bring many a serious
thought to all commercial men interested in the world market.
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