—6 REPORT OF SCHIMMEL & Co. APRIL 1914. 
continued during the first part of last year, with the result that until after the close — 4 
of its first half the demands upon the Reichsbank were exceptionally severe. Not 
until July did these demands begin to show a notable contraction, in consequence of 
the decline in the upward movement in business, the-diminution of Stock Exchange 
activity and the general return-flow of the money which had been hoarded up in the 
previous year owing to the fear of war. The condition of ease which returned to the 
German money-market after the autumn, and the steady improvement of the balance 
in the Reichsbank: made it possible, on October 27, to reduce the bank-rate to 51/s p.c., 
after which the Bank was able, contrary to custom and owing to the continuation of 
the favourable conditions, to declare a further reduction to 5 p.c. even before the close 
of the year, on December 12. 
The improvement in the bank-balance was effected principally by the cousiterane 
increase in the holdings of gold. This increase, apart from the return of hoarded 
moneys and the enlarged issue of small bank-notes, is to be ascribed to the favourable 
turn taken by the commercial balance of Germany, and to the heavy purchases of 
gold abroad connected therewith. On 23" April the gold-reserve for the first time 
exceeded 1000 million marks, and on 22.4 November it reached its highest point at 
1255 million marks. At the close of the year the Bank’s gold-reserve was 1170 million 
marks, or 393 million marks in excess of that at the end of 1912”. 
As might be expected, the favourable state of the money-market reduced all those 
pessimists to silence, who even at the beginning of the year declared an economic 
crisis to be unavoidable in the year 1914. Nobody will of course deny that after a 
series of economically propitious years a reaction must set in sooner or later, but 
all those who have followed the course of trade and traffic during the last few years 
with some amount of understanding will energetically dispute the assertion that 
just at the present time there is reason for looking upon the development of affairs 
in the year 1914 otherwise than in an attitude of quiet confidence. There is scarcely 
an industry in which there is an exceptionally large stock of finished manufactures, 
the greater cheapness of money promotes enterprise; throughout the world, as the 
result of good harvests which have been gathered in most countries overseas, an 
increase in the sale of German goods is to be expected, the quietness which has 
been restored in the Balkans is opening good prospects for business in those coun- 
tries, as well as in Austria-Hungary and in Russia; and, finally, the economic impor- — 
tance of the reform in the United States Tariff is certain to manifest itself more 
clearly in the future than is now the case. All these are entirely encouraging facts 
and it would be contrary to common sense to form an unfavourable opinion of the 
future, merely because of the traces of a certain feeling of lassitude which have 
lately shown themselves in some branches of German industry. The reaction upon 
the economic life of Germany, of the new Army-taxes the effects of which it is of 
course impossible to gauge at present, should not, in our opinion, be over-estimated, 
for of this there can be no question that the national wealth of our people has 
increased at a marvellous rate during the last few years, and that it is therefore 
thoroughly equal to make the necessary sacrifices, which, moreover, will chiefly result 
in further gain to the industries of the cauintty, 
The general condition of business in Our: ‘branch of industry gives no cause for 
fresh observations. The unfair business- -prattices of certain firms, who regard it as 
a matter of honour to serve their customers cheaply, it is true, but with adulterated 
wares, has often been a matter of complaint already. In spite of the revelations of 
our research-laboratory these practices are steadily going on, but from the replies 
ee 
