Could Germany Fight?

Hawke's Bay Herald-Tribune, Issue 207, 17 September 1937, Page 7

Could Germany Fight?

"Senex.")

EC0N0MIC FRAILTY Facts Behind Dr. Schacht's Resignation HERR HITLER'S MILDNESS

(By

Two things have combined in tho last week or so to show up the German war threat for what it is— something wliich may possibly come from despcration, hut which is certainly not as near as the alarmists think. The fii'st was the resignation of Dr. Schacht from tne office of Minister for National Economy. the second Hitler's gosture towards plans for hig German exhibitions several years hence as proof of his pacitic intentions. It would, of course, he foolish to undorrate the effects on European peace of a strident and touchy nationalism, and evidence ominously piles up that sooner or later the Nazis may move against Czechoslovakia in the hope of incorporating the ' 1 Sudetic minority ' ' of Germans there (who are not Germans at all, most of them, hut Austrians) in the Reich. But it is clear that the Czechoslovakian move will not he made if there is a risk that it will draw allies to lier side, and that at the momenfc an international confiict is the last thing Germany desires. At the moment she wishes to steer clear of trouble for tlie excellent reason that she is not ready. Dr. Schacht 's resignation is a direct challenge by the mdderates in the Nazi ranks to tbfl very programme which dosigns to mahe her ready— the Four-Year Self-Su0ciency Plan conceived by the Nazi extremists, put into operation by them, administer6d by Colonel-General Goering, who is oue of them. There has beon strife over this Four-Year Plan before. That was made . clear at the time of the meeting of the Congress of the International Chambers of Commerce in Berlin in July, when ColoncPGeiieral Goering, i.n a dramatic speech, assailed tlioso wlio had been preaching a go-slow policy on tlie self-suffioiency scheino, and declared tbat there could lio no question of Gor* many altering her economic policy. Iron-Ore Workings. Since thcn be has oven announced tho intention to develop Germany 's iron-ore deposits "in accordanee with National Socialist princiiiles," which will inean, in cilect, that since German orc of 30 to 35 per cent. iron conteni costs four times as niuch to smelt a« good Swedish ore of 65 per cent. coutent, Germans will have to pay 300 per cent. more for the csscntial supplies. Deposits in the Harz Mountains showing ua low as 5 aud 7 per cent. iOn ore are now being worked. All this is iinmensely costly^ and to-day Germany ;s internal erisis is hecoipijig acute. There is no longer any Budget, but in a recent caleulation the Economist estimated that in 1933 the German Government used short-term credits of 1,000,000,000 to 2,000,000,000 marks, that in 1934 the figure was 2.000, 000, OQ'j to 3,000f000,000, in 1935 oyer 5,000,000,000, and that the pace would not be lcssened last ycar. ln addition, long-term loans of about 5,000,000,000 marks were floated since in 1933 Herr Hitler asked for bis "four years"- in which to develop Germany. About twofifths of this lias been used to consolidate the short-torm debt, an-1 loans aro now forced on banlcs, Jife insurance cojnpanies, firme. and private fndividiials. ' Thc prcssnro of taxation on tho German workers is now so great that he eats only 60 per cent. of the meat he used to get before the Nazis ycduced unemploj'mont for him. Butter he can get only" on a ration card, and little at that. A bad harvest has made it uecossary for the Governmcnt to take control of the crops, to provide for admixtnres of other grains with wlicat and rye, to plaee guards in the effort to prevont fire lossee. Yet, though food is .short, as much as 1,000,000,000 marKs has beon diverted from food imports to other pnrposes— " guns or butter." And though unemployment is triumpliantly stated to have boen cut to. 600,000, no fewer than 1*2,000,000 people are expeeted to apply for rolief this winter. Toreign-Trade Compllcations. Complicating the prohlem still i'urthor is tho foreign-trado situation. Germany has defanlted in foroign debts. Sha is now the subject of "cleanng" arrangements by foreign banks. For every cretjit of 100 francs "which she establishe's in France, for instance, 16 franes go to liolders of French Dawes or Young Plan bonds, and 59 per cent. to firms owed commercial debts hy Germans. Only 2a per cent. is left to finance German purcbases ln France, This has meant that she has been forcod to adopt barter as the basis of S0 per cont. of her trade, The tren-d of trade . is also against her; for her main cxports have been gtcel and macliinery, textiles, chexnicals — the things which every European poUntry has been trying to make for itself, The riee in the price of raw materials hhg hit her hard, aud the inceSsant juggling of tho brilliant Dr. Schacht has been necessarv to eniibla hcr to carry on at all, Bo has devised infinite plans f'or tho obtaining of new credits, l'rom tbo forced louns at homo to tho obtaining of trade agreements with thq Balkau countrics by the simple expedient of running into debt with them and thcn forcing thom to accept paymcnt in munitions — aud old ones at tbat. But latoly ihe German trade erisis bas grown. ' This ycar the production figures have cxpanded, but the iueroase has beon in capital goods alouc— eonsumption goods have actually doclined. This winter Germany must face Ihe problem of groat food imports in ordor to feod hcr people oven at the old level of potatoos and brcad, with some little meat and butter. The glioddiness and threadbare natul'o of the clothes of the German men has struck recent visitors to Berlin. The chemical and cellulose ( industries are supplying the fahrit^, 1 and there is a malicious story that tai- /

lors take an intending customer out to the Grunewalt forest near Berlin and "let him choose hig own tree," Already expensive materials are being eliminated from m.otor cars and. machinery made for the hom© market. Demoralised Industry. The general pattern of German industry to-day is one of an organisation which is demoralised by subsidies, disorganised through lack of proper planning, held up because of the fact that materials for the manufacture of spare parts of machines are simply not to bo had, liopelessly out with orders and dolivery dates — in fact, what one would excpqet of a country whieh has boen squandering her stibstance for years past, Germany to-day wants peace hoeause she cannot alford any thing else, any more than she could when fbe military leadevs told Hitler that they could not fight and the French ultimatum was dolivcred over possible entry of Morocqo by the Reichswehr. It is a sign of her internal weakness that the resignation of Dr. Schacht and the mildness of Herr Hitler have carried to the world.