FUTURE OF THE MARK

Dominion, Volume 30, Issue 41, 12 November 1936, Page 2

FUTURE OF THE MARK

Dr. Schacht's Statement

GERMANY WILL NOT

DEVALUE

The Germoji attitude to the currency situation was defined in a joint decluratiou by the Reich Government and the Reichbank which Dr. Schacht read to the central committee of the Reichbank recently.

The declaration stated that Germany did not intend to devalue her currency, but was prepared to join in international negotiations with the object of freeing the channels of international trade and payments. Should an internation'al agreement of a more far-reaching nature than the three-Power currency understanding prove possible Germany would reconsider changing her currency policy. The general conclusion drawn from the declaration is that Germany’s price for devaluing the mark and releasing her trade from the foreign exchange control is an adjustment of her foreign debts, either capital or interest or both; the possession of colonies which can supply her with raw materials, and international credits to support her currency while the change-over to normal commercial and financial methods is taking place.

The French Government (Dr. Schacht’s statement said) had conveyed the declaration of the Governments of Paris, flondon. and Washington to the German Government, drawing special attention to the clause in which the co-operation of other Powers in the policy formulated was sought. Consequently it seemed desirable to make the German view public. The intention proclaimed by the three Powers “to foster those conditions which will safeguard peace and will best contribute to the restoration or order in international relations, and to pursue a policy which will tend to promote prosperity in the world and to improve the standard of living.” was, Dr. Schacht claimed, in complete accord with the wishes repeatedly expressed by the Fuhrer and Chancellor in his solemn declarations in the name of the German Government. He referred to the Reichstag speech of Alay, 1935. and that of March 31 last, “containing a comprehensive peace plan.” The three-Power declaration described as one of its constant objects the maintenance of “the greatest possible equilibrium in the system of international exchanges.” This statement was gladly welcomed in Germany, but it could not prevent refereuce to the fact that the economic equilibrium of the world had been most acutely disturbed by both the British and the American devaluation. This would nevertheless not hold the German Government back from supporting, for its part, every endeavour designed,.in the words of the three-Power declaration to relax progressively the present system of quotas and exchange controls with a view to their abolition.” The declaration went on to say, however, that the French devaluation did little to alter the present in security of the international currency situation. Indeed, while the gold bloc counlries had provided stability at least within their own area, this had now also disappeared. The’three-Power agreement did not envisage fixed ratios between their currencies, nor had Switzerland .and Holland established a fixed ratio, so that, as compared with the previous condition of affairs, instability hud been increased. There was now outside of Gemany and three or four other countries, no currency in the world which had a fixed basis; all others, in part within certain limits, in part without restriction, had been subjected to the arbitrary manipulation of their Governments, and had generally and as between each other no firm relationship.

If Germany did not believe in the success of such measures, she was far from desiring to criticize or disturb the measures which the French Government believed it necessary to take. On the contrary. Germany would be pleased if the French were successful, and especially if the security and freedom of international payments were restored. Germany felt it her duty to examine the measures by which she could contribute to the achievement of this objective. The Reich Government and the Reichbank had without hesitation come to the conclusion that for tlieir part they would not contribute another element to the Increased insecurity of international currency and exchanges caused by the devaluations abroad. The countries trading with Germany ought; to know that she saw in stability an indispensable element of international exchange. They desired also that the German saver and worker should be able to rely on the desire of the Nation-al-Socialist Government to maintain their purchasing power and the product of their labour at its full value. Here and there, Dr. Schacht said, the desire for a devaluation had been expressed by interested persons in Germany ; he would not enter into a detailed polemic. I should like, indeed (he added), to say only one thing on behalf of Germany, and that Is that the exchange control system, the discomforts and shortcomings of which We have always recognised, could not be rendered su]*erfluous by any mere devaluation. The heavy burden of debt arising out of the injustice of Versailles, and the difficulties of our raw material supply, compel it. Nothing less than tlieir alleviation will make it possible to dispense with the German foreign exchange control. But upon the solution of this question depends the economic welfare of all the countries which are interested in an absorptive market of 70,600,000 iieojfle. They were fully aware that the present international currency situation imposed Heavy sacrifices upon them, but no pressure would cause the Reich Government to do anything contrary to the interests of their own people. On the other band they would be ready at liny time to take part in efficacious international negotiations aiming at a free system of international trade and payments, ou the self-understood condition, emphasized in the three-rower declaration, of the preservation of national interests. Meanwhile they would watch developments in all tranquillity.