SIGNS OF CRISIS

Wairarapa Times-Age, 13 August 1938, Page 6

SIGNS OF CRISIS

IN EUROPEAN ECONOMIC AFFAIRS GERMANY IN SERIOUS DIFFICULTIES DRAMATIC FALLS IN PRICES ' ON BOURSE. UNEASINESS IN LONDON. ' By Telegraph—Press Association. Copyright. (Recd This Day, 11.45 a.m.) LONDON, Aug. 12. The question uppermost in the minds of city business men is what significance attaches to dramatic falls in prices on the Berlin Bourse. The official German explanation is that the falls are due to heavy sales by Jews fearing that they will not be allowed to hold industrial securities, but it is believed in London that the real reasons are more serious. Germany’s growing adverse balance of trade is causing grave concern, while internal factors are even more alarming.

Reports from Germany indicate that unrest and apprehension are mounting, ! especially as it is feared that the Government may embark on dangerous foreign adventures. Moreover Government demands are exceeding productive capacity. The Government has embarked not only on vast capital schemes in Austria and an enormous refortification expenditure, but simultaneously Herr Hitler personally is sponsoring the rebuilding of five of Germany’s largest cities. The shortage of labour is acute. Industry and agriculture need 700,000 workmen and 17,000 engineers. Production costs are mounting and taxation is rising in view of the difficulty of borrowing. The situation in Italy also is so disquieting that the Department of Overseas Trade has warned exporters to exercise the utmost care in trading, as Italian payments are again fallirig into arrears. The political fears which are partly responsible for the German crisis are also reflected in the London bullion and foreign exchange markets. The total losses of the Exchange Equalisation Fund from gold sales to support sterling are estimated at £90,000,000 in the past fortnight.