ECONOMIC FRONT.

Auckland Star, Volume LXXI, Issue 15, 18 January 1940, Page 8

ECONOMIC FRONT.

ALLIES' ATTACK.

Successful Efforts To Weaken Armed Forces. STRAIN ALREADY EVIDENT. British Official] Wireless. (Received 12.30 p.m.) RUGBY, January 17. Kcononiic warfare was discussed in both Houses of Parliament to-day. In the House of Lords the subject was raised by J/ord Cecil, who was Minister of Blockade in the last war. In the Hon so of Commons, the Minister of Economic Warfare, Mr. H. H. Cross, made a statement 011 the progress of the attack upon the enemy's industrial, financial and economic structure, aimed at crippling and enfeebling his armed forces, and on the results so Ear observed. Mr. Cross repeatedly emphasised the desire of tlic British (iovernmcnt. so far lis consistent with the proper exercise of belligerent rights, to spare inconvenience and obviate hardship to neutral interests, and he instanced negotiations of different kinds now in progress with 14 neutral Governments as evidence of the British Government's goodwill.

The Minister began his review by recalling that the Allies were fighting :l country in which the whole people had lieen moulded and hammered into a vast militarised economic machine, deliberately prepared for the waging of war. That fact, he pointed out, made Germany technically stronger than in the last war, to winch he added the important reservation that it also made her more brittle than before. Accordingly he prophesied that economic events in Germany would take a different course from the last war. This forecast was given point by signs he was able ,to report later in his speech of the effects of the economic warfare on Germany so far.

Rationing of Clothing. He claimed that at the end of four months and a half of war Germany was experiencing the same degree of economic strain she was feeling after two years of the last war. This was reflccte;l in the day-to-day conditions of Ufa. Rationing already extended to clothing and soap. Severe cold had created demands, under the weight of which coal distribution had broken down. There were already significant indications of an abnormal desire 011 the part of the I German population to convert currency into goods—» sure sign of fears of inflation. A "black" market in food was growing up in a number of centres. A shortage of petroleum, iron, copper, wool, oils, fats and other commodities was making itself felt in industrial con ilitions. Since export was given priorityover the domestic market, it was, Mr. Cross argued, the export field which provided the best measure of Germany's industrial<embarra"Bsments. and he cited ns an example, the fact that Germany was now exporting motor cars and to neighbouring neutrals without tyres. He sSiid lie had reports that important steel works in Germany had suspended operations through lack of raw materials. Must Produce Coupons. Th the basic Industries there was frequently a shortage of ,material, lie continued. Practically a'l Germany's supply of raw cotton and 8"> per cent of hor wool was obtained normally from overseas, and the present textile situation in Germany was such that rationing hid to be introduced for clothing of all kinds. He produced a ration card for clothing issued to persons ill Czechoslovakia. It contained 100 coupons which were to Inst a year, but the recipient had to give 60 coupons for one suit, two coupons for a handkerchief, and from 20 to 30 1 for a shirt. Therefore, he said, it was pretty clear that by the end ,of a y.?ar a man would not lie able to acquire n great deal 011 this ration card. Regarding contraband control, the Minister said that, thanks to the Allies' naval supremacy, few ships were evading the control and virtually the whole of German imports which could be eontrolled by this weapon had been interrupted.

Coming to machinery for seining German overseas exports, he said importers overseas had little inducement to order German goods once they became subject to detention, and there were good grounds for thinking . that the Allied decision to make these exports subject to seirare as a reprisal for Germany's illegalities at sea nad sufficed in itseif to cut off the overwhelming bulk of her oversea exports. The result was th.it the quantity, of goods of German origin unloaded after examination was, and i<* likely to remain, small. At the same time Germany was developing devices to camouflage those goods, and he gave fair warning that the necessary steps were being taken to check that traffic.

On the more positive side of the economic warfare the Minister spoke of the close co-operation with the French Mission of Economic Warfare 1 in London and with tlie Dominions and Governments of India and the Colonies. He also described purchases being made abroad designed to forestall the enemy or to compensate neutrals for trade losses. .

He declined to give total figures, which indeed, he said, would be misleading, but very considerable purchases bad been mode from many countries - in some cases representing quite new trading connections.