GERMAN AFTER-WAR RECONSTRUCTION

Dominion, Volume 12, Issue 41, 12 November 1918, Page 7

GERMAN AFTER-WAR RECONSTRUCTION

PLANS REVIEWED

/ /. THE IMPERIAL ECONOMY

OFFICE

The plans of the German Government for getting through tho transition period after peace aro based on certain assumptions, viz., that there will bo a grave shortage (if many raw materials, that exchange will be considerably against Germany, that thero will be a scarcity of tonnage, and that the threat of an economics war i 6 to bo taken seriously. Roughly -speaking, however, it is generally, assumed that this Inst difficulty can be overcome, largely or altogether, by means of peace terms; and though reponsiblo officials do call attention to it tho transition.' schemes of the Government aro being proceeded with on the assumption that it can be avoided and that only natural difficulties will have to be met. There is no doubt, of course,' that the Allies can, if they choose, cut. away the whole basis on which the' German Government takes its stand; and it is to be remembered, in describing the German arrangements, that these are'subject throughout to this radical qualification. Putting this aside, however, for tho moment, it may be of interest to see, in its main outlines, what the very thorough German organisation is; it is useful to understand what haa to be met Transition Economy. Transition economy is now the business of the Imperial Economy Offico (Reichswirtschaftsamt), a ■ Government Department, presided over by Secretary oi Stale von Stein. It'fas constituted by an Imperial rescript of October 21, 11117, to take over certain, functions previously exercised by tho Home Office and the Imperial Commission for Transition Economy, this latter body being now affiliated to it. This Imperial Commission composed of an Imperial Commissioner and nine colleagues nominated by the Chancellor contained nine departments, three.dealing with transport, anu statistics, and six with .every kind of material. .'lt. had done much preliminary .work in., the way of collecting data and statistics with regard to various raw materials and'the need of them, cargo space conditions, • freight' ' agreements already concluded, and goods at the disposal of German firms in foreign countries; and it had tried, but failed,' to obtain a survey of Germany's obligations' to foreign; countries and of what her foreign credit balances would be after peace. It had formed. a Transition Economy Parliament of 398 members, which will now be shelved as too cumbersome;' but 100 of tho members have been transferred to the special committees of the Imperial Economy Office, and this office has also secured- the voluntary .services of a number of • prominent bankers and business men,-who are called .-''professional assessors" (borufstandige JWitarbeiter), and forhi ah -advisory .board which meets regularly to discuss proposals and offer suggestions. Tho Imperial Economy Office is divided into two sub-departinents, Economic Politics and Social Politics. The.latter deals 'with purely domestic questions of trade and labour'and insurance, housing, etc. The former, under tho charge of .Under-Secretary of State Dr. Goppert, is divided into three- sections. Tho first deals with all -matters concerning commercial and economic politics, including transition economy, commercial treaties, and the economic aspects of agriculture, industry, and banking. Tho second deals with shipping and all means of communication, and with commercial measures of Retaliation.' The third is an economic information service, collecting every kind of statistics.and reports useful to German commerce. According to von Stein this is one of the most important branches, and much is hoped for from the inauguration : of a more . complete system of commercial intelligence, making moromso of private channels of information. - The office has, of course, in addition, like every other Government Department in Germany, its own Press •Bureau. Rationing. Business Concerns. 1 The Imperial Economy Offico emphasises the fact that its'objoct is to leave as much freedom of action as possible, and only intervene where necessary. It is' to work through a large number of economy offices (Wirtscluiftsstellen) for the separate materials; these are to bo linked on to tho existing war organisations, so as both.-to get tho benefit, of tho experience of tho .men who have served the war.organisations, many of whom will be transferred.to tho Economy Offices, and also gradually to absorb tho war. organisations or transform them on tho lines of peace economy, it being assumed that conditions will be such that tho transition from war to peace economy must bo gradual and unbroken. Tho Economy Offices are to be corporate, and (in the official view) self-administrative bodies, possessing a certain amount of'autonomy, though with official heads. They are to differ from the oxisting compulsory syndicates (futther creation of which is apparently to bo'stopped) in that they aro not to engage in business themselves (though.somo may contain business sections),; but are merely expert advisory bodies, with the right" to imposo certain dues to cover their expenses'. They are to. contain representatives of the various branches of- the trade or industry concerned, nominated by the various associations and unions in the trade, the nominations will, however, require confirmation by tho Secretary' of Stato! Tho official view is that this is necessary in order to secure adequate representation ot the smaller concerns which have been closed down during the war:,- the Minister is also to appoint representatives of employers and workmen not organised in unions. Theso arrangements havo boon strongly criticised by business men, on tho ground .that they render autonomv meaningless; but the .Government are slicking to their point, fi'or in their eyes as explained by von Stein in'his speech' ot May 1, at the "Hansabund" conference in Berlin, one of their prime duties after the war will bo to 6ome to tho rescue of the middle classes, and prevent the smaller concerns, many. of \ which havo been closed, being crushed out altogether by .competition and prevented from reopening. I'h o main task of the Econoury Ofhces will be to ration, the various business, concerns, both as regards' materials to be imported and as regards stores and materials, to be released by the army after the war; and one object of Government interference is to treat the largo and small concerns equitably, and pre- ;',?» ~l le n ilum » oth syndicates monopolisSft*,- I - •i aid ™ Stein, l;' s K?t to decide, and it must not be those interested. Business men are, how? ever expressing the fear that the Econmv fcT dml ? P ' nt ° *<«V and secrete l " and ffivo « n * inA ° Foreign Trade. . The various tasks before the Imperial Economy Office are not all to be handled on the same lines. . Trade with the Easttor instance, is to be conducted through a specially-formed organisation, the foreign .TradetCompany. As regards tropical produce, it is considered that there will be 'no shortage but a glut; there will therefore be.no rationing, but a restriction upon imports; and, in order to purchase cheaply, the Economy Offices tor tropical produce will be supplemented by an Imperial Purchasing Offico, to conduct the actual buying. Tho most difficult problem is the textile'trade, whoro tho worst shortage is expected. There will bo nine Textile Economy Offices, each for a separate material—cotton, wool, silk, etc.; but they will all be subordinated to an Imperial Textile Office, u purely official body, whoso duty will be to preserve a balance between tho different raw materials and their manufacture. Strict rationing will be necessary, which calls for considerable official regulation ; consequently the right has been reserved to tho Chancellor to 1 approve tho chairmen of the executive committees of the various Economy. Offices, and tho Imperial Textile Office is not only to be- represented nt all meetings of (lie Textile Economy Offices or their executive committees, but is to have power to veto any measures it may consider contrary to the public interest. The, Textile Economy Offices will have power'to demand information as to factory management, etc.; and it was'.nt first -proposed to give tbem the newer of closing factories.

Shinping, of course, is (or rather via, for the question is njinin under itepnl.ia(ion) In lie dealt with on spoeinl lines, dictated by tlio belief that there will not be sufficient lonnago for nil imports.

The shipowners at (he Government's request have united themselves in a Shipping Firms' Association; and (lie official proposal was to deal with the association by mean? of an organisation to be formed called the Cargo Space Allotment Company, whoso name explains itself. Tho Allotment Company was to be controlled by the Imperial Economy Office, through an Imperial Commissioner, nominated by the Chancellor; it was to bo authorised to issue orders as to the employment of German ships, what voy-. ages they were to take, what uovts to visit, what goods to carry; chartering and freight agreements were not to bo valid without its saw! ion. The Imperial Commissioner was also to intervene in the mailer of freight rates, which were (n bo calculated on a scale to enable German shipping firms to ramnet,-. ivttn foreigners. Those who recall tho part played before the war in. building up German exnort by indirect Slnto rate subsidies will naturally suppose thai this means a State subsidy in eomo form. Strong Opposition. The.opposition in Gormany Io tho plans of the Imperial Economy Office is extremely strong, and is not confined to the' big interests; for the "Hansabund," which lins rather crystallised tho resist; anco round itself, to some extent represents the middle classes. Many com- j mercial associations and chambers, of com- i merce are.opposed to official interference; so are the shipowners, led by the great Hamburg-Amerika Lino. The opposition would like to have done with war organisations and economy offices altogether as soon as peace is signed, and get back to unrestricted liberty of trading; they profess fo regard the. rationing of raw materials as impossible, in face of the 'illicit trado. Their attack has rather been concentrated •on the Imperial Textile Company and the Cargo Space Allotment Company. As to tho former, the "Hansabund" has pc-tifioned the Bundesrat to order the Imperial Economy Office to bring forward a now set of proposals; the result has not yet transpired. As to the . latter, tho "Hansabund"' convoked' a big conference at the end of April, at which Herr Huldermann, of Hamburg-Amerika,. vigorously attacked the Allotment Company, contending that the reduced German tonnge would, nevertheless, be ample for imports^-and that the fettering of shipping by the "Allotment Company would be fatal. Since then the War Committee of the shipping firms has definitely rejected the .official plan; it is said that the Imperial Economy Oflice has withdrawn it, and..is negotiating with the War Committee- afresh. Credit and Exchange, Laat comes- the vital question of credit anil exchange. In an address delivered at Frankfort on April 12, Dr. .Weber, of the Imperial' Economy Office, laid strew on .tho exchange question and the difficulty Germany would havo in paying for imports. In'peaco she )xiid by the export of- manufactured goods; but this sho cannot do'for some time, especially as oils-and fats must, be imported before raw materials. All she could export to begin with, Weber continued, would bo coal, iron, and certain chemicals; (she will not, in fact, bo able to export iron, as she will not,have enough for reconstruction); -to export goods made from substitutes (might merely mean the loss of her old markets, altogether—a notable admission. -. Weber, in fact, exposed what, apart/from the action of the Allies,'will bis Germany's most radical trouble; she cannot' import till sho exports, and she cannot export till she . imports. - Credit alone can bridge the gulf. But since its rise in the winter the mark Ims again fallen' heavily, and will doubtless now fail further. Tho old Imperial Commission for Transition Economy foiled in its endeavours to get a clear view of German credit balances abroad after peace; and .the present writer, has not met with any statement of what the Imperial Economy Office proposes to do (if anything) ' toward meeting the exchange trouble and securing credits, for Germany in foreign coua : tries. It has advised Gorman merchants .to make advance purchases in foreign countries on. credit, but has given no idea how credit generally is to bo secured; while the course of the war has stultified the idea of advance purchases, at least in. Entente countries.

As the Imperial Economy Office is silent,, it may bo noted that an unofficial writer, Herr Feilor, who treated tho.subject in the "Frankfurter Zeitung" in June, whilo recognising the vital importance of tho question of German credits in foreign countries, saw no method of securing them except by the pence treaty —that way of escape from every impasse —which must secure that, "our enemies guarantee-us exchange loans' in their countries." That is, tho German Sword must forco the Allies to givo Germany credit.