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Danat. Next morning the storm broke. Danat, the Darmstädter and National bank, smallest of the three D Banks, failed to open its doors. Hysterical investors started runs on the others. To ward off complete calamity Old Paul von Hindenburg authorized the Government to close all German stock exchanges and banks for two days. Beggar Luther, still dizzy from traveling, climbed into his airplane again and rushed off to Basle to beg again from the Bank for International Settlements.
Paris for the first time began to feel that they might have overstepped the mark, suddenly saw the red shadow of Russia athwart the German map. Was there the wildest possibility that Germany might borrow from Russia? If German Communists seized the Reich would they ally themselves with Moscow? Might the Red Army soon be on the Rhine? Le Figaro recalled the German-Russian Treaty of Rapallo, and added: "A new consecration, and no doubt a strengthened one has occurred between Russia and Germany at the moment when with tears in its voice the Reich is imploring us to be generous. . . ."
Breathing Spell, Immediately upon landing at Basle, Dr. Luther was ushered into the rich halls where the chiefs of central banks and U. S. executives waited. His step was firm, but his face deeply lined. Just what Beggar Luther said, remained behind the closed doors of the conference room. But at the end of twelve anxious hours, the word was issued:
The B. I. S. would stand for a three months renewal of its quarter share of the $100,000.000 credit which would have fallen due last week. Clear was the implication that France, Great Britain and the U. S. would join in the extension. Beyond that, the B. I. S. offered sanguine, if somewhat vague, promises to "collaborate fully" with the various governments in the rehabilitation of Germany's markets.
Dr. Luther let it be known that he had received "favorable answers" from Washington, Paris, London and Rome to his appeals for aid. For its part, Germany was taking three measures toward self-preservation: 1) restriction of credit within the Reich; 2) closing the Boerses and thereby checking foreign withdrawals of capital—a sort of moratorium which might be maintained for weeks if necessary, until the "collaboration of governments" is effected; and 3) the guarantee of foreign depositors in German banks.
In London expert opinion was that only a loan of whopping proportions would do Germany any real good. In Washington, the $100,000,000 extension was viewed only as a starting point.
State Capitalism. While the world was waiting for the U. S. reply an even more startling rumor came over the wires. In an effort to avert revolution, the Cabinet was seriously considering abandoning the principle of private capitalism, and substituting for it a system of state capitalism in which the Government would take control of all private industries, banks, shipping, trade, to straighten out the nation's finances. This would be arriving at practical Communism by the shortest cut possible. Moscow jubilated, hailed the beginning of the world revolution.