WORLD AFFAIRS.

Auckland Star, Volume LXII, Issue 166, 16 July 1931, Page 6

WORLD AFFAIRS.

A WEEKLY REVIEW,

(By BYSTANDER.)

The Continental crisis, of which Germany is the focus, continues to absorb the world's anxious attention. The collapse of the great Darmstaedter Bank last week threatened at the moment o bring down the whole national system of finance in ruins. But subsequent reports from Berlin supply the assurance that the banks generally are safe and sound enough, and the solvency o the Reiclisbank has been secured by .the joint aid of the great foreign banks acting thrpug Bank of International Settlements. On the whole, the outlook has improved during the past two days; but there is, unfortunately, a good deal of evidence which suggests that the reactionary party in Germany is doing its best to make political capital out cf the whole situation.

Playing Politics. It will be remembered that while the terms of the Peace of Versailles were still under negotiation the German monarchists and militarists tried to c'oercc the Allies into dealing leniently with Germany by the threat of revolution. Ihe country, driven to desperation, would fling itself back into the arms of the Hohenzollerns and fight to the bitter end, or, alternatively/the people, ready to perish rather than endure further humiliation, would "go Bolshevik" and spread the red flame of Communism throughout the world. As a matter of fact, there was not then the slightest danger of seeing either the Monarchy restored or Bolshevism established in Germany. But these reports were exploited by the reactionaries in their determination to save Germany from further punishment, and the same game is being played with the same assiduity, and apparently with i some success, by the German enemies of tle Republic to-day. Nazi or Bolshevik. Of 'course, at' this critical juncture the inevitable Hitler steps once more to the front of the sta»e. In a Press interview he has announced that h© is "prepared to assume power without delay." According to this apostle of -revolution, there ane only two alternative prospects visible for the future. "Either our movement gains power over Bolshevism or' Bolshevism will turn Central Europe, and possibly the world beyond, into chaos." It reads precisely like an extract from a German reactionary newspaper of 1919 or 1920. On the other hand, it must be admitted that the Nazis are an important factor in the political situation. According to latest reports, their numbers have risen from 800,000 in 19-8 to 10,000,000 to-day. There are also said to be 6,000,000 Communists in Germany, so that the political Opposition controls about half the electorate. Moreover, the Hitlerites have been strengthened lately by an alliance with the National People's Party. Since the retirement of that veteran "fire-eater" Coiint Westarp this party has been%ntrolled by Dr. Hugenberg. This man' is a great newspaper proprietor, the head of the Steel Helmets, and a violent enemy of the Republic and of France, to whom the mere name of Versailles is anathema. With such a coadjutor and counsellor, Hitler and his Nazis are likely to become* more dangerous than ever.

The Armament Builders. According to a letter addressed by the Nazis to the .Reichstag, what Hitler and his friends most particularly resent just now is "the attempt by the Fuench and English to rob Germany of the remnants of her sovereignty." What this means is thait France has refused to accept Mr. Hoover's proposal for a suspension of the reparation paymcaits unless Germany will guarantee not to increase her navy, more especially by building more "pocket battleships." The Germans term this ' "'blackmail," and the German newspapeis have made ferocious attacks on our Foreign Minister, Mr. Henderson, for encouraging France in her "political blackmailing demands." The German Chancellor has given an emphatic assurance that "an increase in the expenditure on the army and navy during the Hoover Plan period is nefither intended nor will it occui. Moieovei, the Germans in this matter have a just grievance the Powers, who have foi bidden Geiman\ to raiise armies and build navies at her will, and arc »still expending enormous sums for offensive or defensive purposes themselves. Who Casts the First Stone? HI is an unfortunate fact that only a few days ago-. the French Senate voted an additional £20jt)00,000 for the defence works along the Belgian, Italian and German frontiers on which over £11/100,000 have already been spent. At the same tinuo the Senate passed a credit fox the constiuctiou of eight warships next year, and, as a codicil, the Minister of Marine tabled a Bill authorising six 'more cruisers and minor craft for 1932. _ Le Temps" declares that "neither world opinion nor thait of France will sanction further French sacrifices without an assurance that Europe can work in future with Germany in a condition of peace and security." Can we wonder that the Germans point the finger of scorn at France's protestations of pacifism? Mr. Hoover has told Etirope that the Americans will not remit war debts to nations pleading incapacity to pay if those nations fail to reduce their armaments. But wiliat of the Americans themselves? Last week it was announced at Washington that 11 new destroyers were to be built at a cost of about £10,000,000 —the first destroyers to be built by the United States since the war. Mr. Hoover has fiormally accepted an invitation from the League uf Nations to attend the Disarmament Conference at Geneva early next year. I wonder how he will reconcile the American demand for cessation of Bfrmament building with his own naval estimates. ;it seems to me that, as a great humorist lias said, "•it don't add up right, somehow."

Austria and the Bank. About a month ago a political crisis arose in Austria. Dr. Scliober, once Chief of Police, and /subsequently Chancellor or Prime Minister, had done his best to hold the balance evenly between the Socialist and Fascist elements throughout I the country. But he had accepted Air. i Henderson's suggestion to refer the proposed I Customs Union between Germany and Austria to the Hague Court of International Justice, and lie was foiced to resign. After several failures, Dr. Seipel, an ex-Premier, succeeded in forming a Ministry opposed to the Customs Union, but the Pan-German faction was too strong for liini, and he in turn resigned. Meanwhile, financial conditions in Vienna went from bad to worse, till at last the Austrian National Bank was facing ruin. At this juncture the Bank of England announced its intention of providing credit for Austria to Vthe extent of £4,500,000, thus in all probability averting complete bankruptcy. After the war the Powers did their best to restore Austria financially by means of large guaranteed loans, and Britain alone has advanced her £10,000,000. But the dramatic intervention of the Bank of England at this critical moment was received with enthusiasm not only in Vienna, but in Berlin, and in both capitals it lias been gratefully recognised that British capitalists "are prepared to apply their vast resources to the restoration of European finance." The subsequent co-operation of the chief British, French and American banks to provide credits for the German lleichsbank and secure the stability of the mark, has certainly helped to strengthen this impression.