GERMANY.

Taranaki Daily News, 3 April 1916, Page 5

GERMANY.

HEATHER MEAL ;CBED TO MAKE EXPLOSIVES, j . AN INTERESTING DISCOVERY. Received April 2, 6.5 pjn. Copenhagen, April 1. An explosion at the Hamburg heather,jneal factory is interesting from two standpoints. Firstly, it explains the enormous importation of heather, which (it now transpires is used in the manufacture of explosives; secondly, it proves ..the employment of French prisoners for Hinig purpose, and this is contrary to The Hague Convention. , Two prisoners were killed, and many were wounded. A REPORTED AGREEMENT. W THE REICHSTAG.

London, March 31. A Berlin wireless message states that the different parties in the Reichstag Budget Committee have agreed to see that the war must be carried out by all means most instrumental for securing the successful issue. , i ' '■' . " < J THEY FEAR PEACE. i•: • i '!'[, NIGHTMARE OF GERMAN '■'[ FTNANCIEB& DESTROYING GERMANY'S CREDIT. Zurich, February 4. ' There law been great heart-searchings in German financial circles over the fact that the exchange of the German mark U sinking is all the neutral markets bordering on Germany. The immediate cause of this new fall wa» she speech - of- the German Chancellor, which was a disillusionment for pro-German capitalists in Switzerland, Holland, and Scandinavia. Before the Chancellor's speech, the capitalists, having their investments in Germany, credulously believed in the peace-songs of the German.agnts and propagandists. The declarations of Bethmann-Hollweg, foreshadowing a programme of annexation, destroyed all hopes of peace, for even the most violent-pro-German capitalist in the neutral countries knows the strength of the Allies well enough to realise that sutb. a peace is a Grman peace, and not a European' peace—that is to say, an impossibility. The consequence was the . falling of the rate of the- German mark from 106 and 107 to 90 and 100, and no efforts on the part of the Germans have sufficed to raise it again. This was the immediate falb it is hardly necessary torecall that before the war the Germth mark stood at 123 and 124 in Switl serland. The conditions that have conduced to the fall lie chefly in the fact that the amount of Swiss, Dutch, and Scandinavian capital employed in Germany is fatgreater than the amount of German capital employed in those countries. When the value of the mark first began to fall, Swiss and other neutral capitalists hesitated to touch their interests payable in marks, and left them, as much as possible, in German banks, hoping the value of the' mark would rise again. But the longer the war lasts, the smaller grow* the possibility of Germany being able to pay the interest on this 'neutral 'tapital-over £120,000,000 from Switzer- > land alone—with German products, as is the manner in time of peace. Every new sign that peace is not near has thus the_ effect that neutral capitalists sell their German securities, fearing a further fall in the value of the mark. THE ECONOMIC CATASTROPHE. Until a few months ago, the fall of the mark did not cause much trouble in Germany itself, the British blockade having reduced the imports of Germany to such air-extent that the de-valuation of the mark was. not generally felt. Now the picture changes: the exhaustion of industrial raw material of land (through lack of chemical and other fertilisers), of live stock, and of all kinds of foodstuffs, brings a new problem for the leaders of German finance and industry. They fear now the economic catastrophe of the peace.. They-.recognise that as soon as peace comes German manufacturers and merchants will have -to import enormous quantities of raw materials from overseas. .When we consider that, before the war Germany's imports from overseas totalled fri>m five to six hundred <nfllions sterling, and that at the outside, only onl-third of this quantity has been ©Waistble, by "substitute-dodges," <K jbqgt Jfagseuinlßj it >* cajculated that

there would remain, after only two years' warfare, a deficit of 800 millions sterling of exhausted stocks. This sum is far greater than the German holdings of enemy and neutral investments. Germany cannot pay this £800,000,000 with exports, as she cannot produce goods for export before having the raw materials to produce them with. When peace comes, Germany will be unable to regain her position in the world's markets unless she can import—and quickly, this eight hundred millions' worth of arrears of overseas raw material. Payment for this material with gold would be out of the question, as the gold-cover of the German paper money, whose circulation is abnormal, cannot be reduced without running the risk of an internal disagio for the mark. Neither will the Americans and other overseas producers, accept war loan paper in payment. It is obvious, too, that if the German banks that have hitherto subscribed two-thirds of the war loans with the enormously increasing deposits of manufacturers and merchants (who cannot buy raw materials), must pay back these deposits, they would be forced to sell war loan scrip. This would spell catastrophe for the German State, as she value of "war loans" would sink irremediably in the hour when the banks began to sell.