Up north at Basle in the German-speaking neck of Switzerland drowses a bleak building once the Hotel de I'Univers, today the financial watch tower not only of Europe and Asia but of the entire world. Through its small lobby scurry page boys, their grey liveries initialed in silver with the suggestive letters, BIZ. The big table around which biggest business is done by the Governors of Banks of England, France, Germany Italy, Japan and a U. S. group headed by J.P. Morgan & Co. is draped in grey, the color of money bags. On this grey table lay fresh and crisp last week the second annual report of BIZ or Bank für Internationalen Zahlungsausgleich, famed in English as BIS (Bank for International Settlements), in French as Bri (Banque des Reglements International—). When he stood up to report, Manhattan Banker Gates W. McGarrah, President of BIZ was seen to have eased his substantial midriff by undoing as usual the two bottom buttons of his vest. What President McGarrah had to do was to report a notable BIZ success and issue to the world an ominous warning which he hoped would produce action.
Cash Register? Two years ago, when the Young Plan was supposed to have "taken Reparations out of politics." BIZ was set up as the "Cash Register of German Reparations"—the bank through which German payments would be distributed to the Allies (TIME, May 26, 1930) Jealous of their own power, certain central bank governors insisted at the time that BIZ must not become a world bank—but those days seem gone forever.
Depression drove President Hoover to put Reparations back again into politics with his Moratorium (TIME, June 29 et seq.) Thereupon German payments ceased and BIZ would have had to shut up shop had it been only or mainly the cash register of Reparations. Instead BIZ has never been busier than at present and is today the World Bank. In softly burring Scotch last week BIZ President McGarrah announced a BIZ profit of 15,182,819 Swiss francs ($2.930,000) or 4,000,000 Swiss francs ($772,000) more than last year.
Monetary Internationalism, Said Gates McGarrah, reviewing the Great Depression Year: "Events have shown to what extent our monetary systems, bott great and small, have become interdependent. Internationalism in monetary matters is now not merely a theory but an accomplished fact! The tidal wave of uncertainty and fear . originated in Austria, swept quickly through Hungary and Germany . . . flowed onward to Britain and the Scandinavian countries backwashing into the United States, and carried unusual demands on the American gold supply and credit system.
"No such widespread effects (which extended soon to Japan also) could have occurred except for the already existing essential unity in international finan which ignores political and geographical frontiers. This interdependence is not confined to the field of finance, but penetrates much further into the whole economic structure of various countries
"The indices of production, employment trade and profits show to an astounding degree recurrent tendencies in almost every country of the world. All the evidence available leads to the conclusion that any hope that a single country may achieve prosperity apart from the rest of the world would indeed be based on an insecure foundation."