SITTING ON A POWDER BARREL.

Dunstan Times, Issue 3142, 6 November 1922, Page 8

SITTING ON A POWDER BARREL.

(By Mercurius). For !i long 'time the moat determined hunter after information was unable to gather from an authoritative source the number of mark notes Germany had issued .by means of the Keichsbank, the German national hank. Lately, however, it has been stated that the total quantity up to about three months ago was 205 milliard*. As n milliard is equal to a thousand millions the calculation can easily bo made as to the lace value ol these notes in English money. Set out in words, for the figures arc appalling in their immensity, the 205 milliards denote that Germany has issued paper money of a lace value of ten thousand and two hundred and fifty million pounds in English money, a sum about equal to the national debts ol Britain and the United States. Against this the Reiehsbank holds in gold £54,000,(100. the gold, however, being worth much more than the ten thousand' million pounds worth of mark notes. Germany ha.s the paper marks, which are practicality valueless, and she has the fifty-four million pounds worth of gold which is about all the negotiable money she is possessed of, but she cleaves to this gold with the tenacity of a limpet to a rock, or. as the American* expressively term it. like a lightning bug to a hot jam rook. Certainly Germany wiped out her internal debts with her paper money, and by that amount the Government of the country improved its positipm, bufl what about the people? If the German paper mark was equal in value to one shilling, as it was before the war, Germany has issued about enough of them to buy out France, lock, stock and barrel, and yet France complains that Germany will not pay her the overdue indemnities. As the paper marks have really no value whatever, and the £54,000,000 in gold will not pay the reparations, France wants Britain to assist her in taking over the forests, coal mines, and other State acquisitions, but Britain has too much, business acumen to be tempted tk> march into a financial morass of this description. A fact that is worth recording, however, in this connection is that Germany cannot buy in outside markets with her own currency, and she has to balance her imports with her exports, which she finds it difficult to do. She. however, stole a march on the foreigner immediately after the armistice. .She began to turn out marks by the waggon-load, and paid for her imports with them, refusing, however, to take them back in payment for her exports, as she said foreign currencies were what she wanted to pay her debts with. She also established agencies in foreign countries for the sale of marks before they dropped in value to the fraction of a penny each, and she turned this huge exportation of marks to good account. With what she obtained' IJor them she has paid to the Reparations Commission £ 115,000,000, a sum, as the writer has previously pointed out, about equal to the cost of the army of occupation, but nothing of the reparations. This was a remarkable trait of German astuteness, and Fritz, had he been a Jew, and lived in the time of the Pbaroalis, would have spoiled the Egyptians to such an extent that he would have left them with nothing but the> Pyramids. The German manufacturer has the foreign currencies, which are valuable, while the foreign trader has the paper marks, which are valueless. Hut Germany has reached the end of her tether. Her traders, if they wish to exist as traders, must part with the foreign currencies in exchange i'or goods, and if the prophets are correct in their auguries Germany will be back before long to a war-time diet. If Germany had to redeem her paper marks at their face value she would have to sweep everything in the country into the melting pot, and 1 she could not l'ive. a week if she did that, At the present value of the mark the fifty-four million pounds' worth of gold she holds would buv the ten thousand million pounds' worth of marks back, and leave a. handsome surplus. Germany wuold then lie clear of her financial incubus. Hut the transaction would create a revolution, and Germany daren't face that. What will happen to Germany no man knoweth. She cannot be boiled down, like the old sheep, for the tallow thai, is in her. and there is apparently not much else that, can bo done. She can go into liquidation or bankruptcy, and one or the other course she must adopt unless united Europe and the United States come t<> her assistance. * * * * Not much attention need be paid to the jubilations of the Franch press over the resignation of Mr Lloyd George, and his Government. France herself i«s in Mich a desperate plight financially that she cannot hope to get "round the corner" unless she tan discover a, benevolent, midas to lean up against tor support; but inasmuch as benevolent midases are difficult to discover she has to depend entirely on the payment of the German reparations lor rescue from her embarasttments.. Mr Lloyd George and bis Government rightly believed that Britain has done enough financially for Europe in the meantime, and because France, iin a spirit of communism, would wish to divide up with the only two nations better off than he reel f. She shrieks at Lloyd George and bis Government because they have thwarted her itt her attempts" to bring Germany's collapse within measurable distance. The French newtipaiperei, however, maj find that the British Conservative Party, if it scores a success at the elections in November, will pay less attention to M. Point-are than did the Coalition Government, for one of the cardinal planks in its platform is the disentangling itself aa far as possible from foreign adventures. Tf, therefore, Mr Lloyd George's Government would not venture into the forests and coal mines of Germany is it likely that Mr Boltar Law's Government will push into the chaos that such a. step would' create:-' Mr Bonar Law says Britain wants peace and) quietnesw for the purpose of putting its house in order, Germany is not yet a dead horse), hut it is so tottery on its I'effs that an acceleration of speed may bring it down on its knees. Up to a certain point the femie of paper money by Germany was the only thing that the Government of that country could do, but it far over-reached itself, and when it had reached the point of safety it threw caution to the winds: in the hope that it would still be able to ••ell its paper marks to the receptive and gullible foreigner. The foreigner, however, scenting danger, buttoned up his pockets, and the result was the fall of the mark to a price that dbes not now cover the cost of the paper and printing. The mark has thus reached the |*oint where it has really no value, for the more Germany now issues the poorer she becomes. Poland. Czechoslovakia, and Jogo-S'lavia followed Germany'* example, and issued paper money liberally, but these countries saw and were advised that along this path stalked red ruin. They dismantled their printing presses-, and are now on safer ground. Biiissia and 1 Germ-any might as well enter into a partnership of bankruptcy, if for nothing else than to keep each other company in warding off the importunities of their creditors. To stabilise the paper currency of both, countries it would be necessary to redeem the paper marks and roubles, and

how is that to be done? A big loan to Germany has been suggested, but Russia is a hopeless financial wreck, and no one will lend to either under the present conditions. It is therefore useless for France to chuckle over the resignation of Mr Lloyd George's Government, for it brings" her no nearer the handling of the German reparation's. Tf it were not ludicrous to suggest it. one of tlu: methods by which France could achieve something would be to lend Germany, if she had the money, a sum sufficient to pay the overdue reparation instalments, and pay herself with her own money. That apparently is about the only way it can be done, for Britain and the United 1 States are not in the mood to throw hard cash in amongst so much paper. Obviously both these countries are looking, especially to the United States, to venture on the. very thin ice that bridges the gap in the security for a loan. '** » * The politicail parlies of the Old Country have fallen upon evil days. The Liberals and Conservatives are shivering themselves into fragments that threaten to jrcpel every attempt to secure a workable agglomeration. The Conservatives are divided into non-Coali-tionists and Coalitionists', while the Liberals are ranging themselves under the banners of Liberals, Coalition Liberals, Asquithians. and Independent Liberals. In reality the only party that seems to be homogeneous is that of Labor, and that even is not sure of itself. Labor would up-end the whole Constitution, but it would perhaps be unfair to apply that intention to the whole party, for some of its members are discriminating enough to realise that stability cannot be chiselled out of chaos, and chaos means a .something that even Germany might envy, for that unhappy country is tottering on the brink of a calamity that \$ worse than chaos 1 . Mr Lloyd George is. gting to the country shorn of much of the mana that enwrapped him in the earlier days of the war. when he succeeded 1 in bundling out, with the aid of the London Times, the wait-and-see of his compatriot Mr Asquith. who would assuredly have the country to ruin bad his reign as Premier not been ended by his overthrow. Mr Asquith now leads a party of his own. and no doubt ex'pects to return with a following strong enough to force Mr Lloyd George out of all 1 consequential! consideration as leader of the Liberal Party. Such s life, especially political life. In the earlier years of his political existence Mr Lloyd George was 1 a firebrand, and his prynotechnic squibs' dismayed both friend and foe. but when the war broke out he purged himself of most of the smoke and dirt that clung to bis fulminations, and stood out as the most capable man amongst all the political parties. But for the energy he infused into Britain's part in the war there might have been an overwhelming calamity to the Allied arms. He shouldered the work of a Hercules, and carried a. load of responsibility that would have crushed a less determined' character. The British people, or rather some of them, liowever, aire not satisfied with the rapidity of the country's recovery from the effects of the war, and are looking round for a scapegoat. The taxation in Britain is colossal, but not quite as heavy as that in New Zealand, yet we have not made the clamant demands for a sweeping reformation out here that have been made in the. Old Country. Thero is, however, as much necessity out here as in Britain, which is still weighted : with a great part of the load that has descended to it owing to the shakinessi of European finances, (hit here we are not trammelled with similar conditions, but we have not made equally desperate efforts to secure relief from an intolerable position. We go on piling loan on loan, as if that would do more than temporarily alleviate the conditions' of life. Elections are taking place in both. Britain and New Zealand, and in both countries the parties who catch the .judge's 1 eye at the winning post will feel freer to put a policy of stern retrenchment in operation, for in that lies the only hope of relief. Mr Lloyd George has performed a great work, and it will h$ in the na tore of base ingratitude if be is turned down at the polls, for it must be remembered that he was head' of a Coalition Government, and all parties are. equally responsible for the condition «.f th.r country, whereas in New Zealand the Reform Party, for the past four years or so, have guided the destinies ai the Dominion.