SHRINKING

Evening Post, Volume XCIII, Issue 99, 26 April 1917, Page 10

SHRINKING

THE FALLING MARK

GERMANY'S DECLINING

STRENGTH.

Many.testa may be applied to discover whether relatively Germany is gaining or losing strength as compared with the Allies. Judgment may be based on the activity of'her armies, on the success or non-success of her navy; on the morale of her individual soldiers. Or it is pos-J siblo to take as a foundation the stories of neutral tourists, to read between the lines of heavily-censored newspapers; to learn from the tales of prisoners of war, and from letters discovered on the dead and wounded. None of these tests are to be wholly depended upon. Neutrals' may deceive, because a story that pleases is more easy to sell than a story that depresses; or the neutial may himself have been deceived or may be in an inaccurate observer. The soldier whose letter is intercepted may be a constitutional' pessimist, or may be ill-informed.. The information published in the newspapers may be falsely interpreted. There is another test, however, the importance of which cannot be gainsaid. >It ia the varying value of the mark in neutral countries. This tells its tale to those who can read in an accurate and convincing way. A well-known Sydney business man recently wrote from London to the New South Wales Chamber of Manufactures, saying that when he could spare a few moments during his busy day he studied the Exchanges. In doing so he showed a clear insight. SOME INTERESTING FIGURES. It is now more than twelve months since the declining value of the mark in neutral countries was first pointed out. Since then the drop has been fairly continuous. At the end of January, German money had declined 37 per cent, in Sweden, 32 per cent, in Norway and Denmark, 31 per cent, in Hol- | land, 33 per cent in Switzerland, and 30 1 per cent in the United States. What does this mean? It does not mean that the gold ten-mark or twenty-mark 1 pieces are worth any less than they were. They, like sovereigns, cannot materially depreciate because they are measured in terms of themselves—that is, in terms of gold. But what it means is that, if Germany wishes to purchase foodstuffs in, say, Switzerland, to the value of 100 marks, whereas when the Exchanges were normal, as they were before the war, she would have obtained 123.44 francs worth, she can now obtain only 83.45 francs worth. We do not know to what extent prices have risen in Switzerland, but a rerent statement received from Norway was to ths effect that prices in that country had advanced by 85 peri cent. since the outbreak of war. Suppose, then, Germany wished to purchase some.' salt fish in Norway, as she could do, despite the British blockade, through using the Baltic, then for every hundred marks' worth on the basis of peace prices she would have to pay first 1185 marks as prime cost, and then it further 61 marks through the fall in exchange, or 246 marks in all, for what prior to the war would have cost her but 100 marks. To such a pass has Germany been reduced that her Government has in some cases compelled her merchants to quote for export, not in terms of marks, but in terms of kroner, in the case of Norway, Sweden and Denmark; in terms of francs in the case of Switzerland, and of florins if it be desired to get goods over the border of Holland. In this way it is , hoped that Germany will avoid the full effect of the fall in exchange. In the . early days of the blockade the German Government conceived another scheme. It instructed its exporters to refuse •to sell certain necessary commodities; for instance, iron ore to Norway, unless they were paid for it, not in money, but in what at the moment was of much more value to the nation at, war, .that is, in bales of cotton or in pounds of rubber. The rationing of neutral countries by' Great Britain put an effective end to that sort of .thing. The British blockade would indeed have been a farce had these neutral countries been allowed to go on importing cotton, rubber, copper, and other contraband .goods merely with the object of transferring them to Germany. Neutral countries have found that it has not been altogether satisfactory trading with Germany during war time, as that country has proved as unscrupulous towards them in the field of commerco as she has proved without conscience,in the fields of battle. Take a Norwegian experience. Norway has no iron ore for her industries, and in times of peace depends 1 upon England and Germany for supplies. At present she can get none from England, but has been ■ getting a little from Germany via Baltic ports. Not long ago Norwegian importers were astounded to '• find that German shippers were diawing' upon them for 60 per cent, above the contract price, and tha drafts had to be met before the consignees could get the bills of lading, and consequently the goods. Of course, the .innovation was quite illegal and altogether exoißHtaatj but where the iron ore was essential the additional impost had to be paid. Swindling such as this will do Germany untold harm after the war, and will correspondingly benefiU the Allies in waging the after-the-war conflict for trade supremacy. GERMANY'S COMMERCIAL "INTEGRITY." One of the results of the war has been that Germany's commercial integrity hae suffered enormously. Ever since in the day or ,two preceding the outbreak of hostilities, when German traders robbed Bradford shippers of millions sterling, to the present day, no unscrupulousness is too unseemly for her commercial men to practise. Her credit is fast fading away as she becomes more and more unwilling to pay for her imports in gold, more incapable of paying for them in goods, and unable to pay for them with securities, as her secm-ities are no longer regarded as secure. The authorities in Germany are quite conscious of the awkwardness of their position. They have endeavoured to relieve the situation by controlling the importation of goods from neutral countries, a special Government department having been formed for that purpose. They, have tackled the situation 1 from another angle, as well as by establishing buying agencies in neutral countries through which all purchases are to be exclusively made, fcnus eliminating competition in neutral markets. Whore German goods were urgently needed, as was the case with some drugs, the production of which has been a German monopoly, the ' exporters have been enabled to get level to some extent by enormously raising their prices. This, ■ however,' has "only been possible in connection with a limited number of lines. Where there has been open competition, Germans are suffering the chagrin of seeing their former prosperous oversea trade' being captured by the United States and by Japan. THE MARK AND MAN POWER. It is interesting to consider the fall in the value, of the mark in its relationship to enemy man power. This has been done very ably by Mr. T. H. Penson in the current' issue of Land and Water. He classifies,the use of German man power as follows: — 1. In meeting the requirements of, the army and navy, lines of communication, ! on neutral frontiers, etc. 2, fe supplywfJ}y}egfe£L^S army j

and navy in the matter of munitions, food, and clothing. 3. In supplying the needs of the civil population. 4. In production of goods for export. It is evident, Mr. Penson points out, that the labour power available for maintaining the balance of Germany's foreign trade must be regarded as a residue left after the three first needs have been satisfied. Losses in the field must be made good. The demand for munitions is an ever-increasing one. For both these purposes, man power must be withdrawn from the only possible sources—those engaged in supplying the civil population and those engaged in producing, goods for export. All this tends to show that the fall in the mark is largely due to the falling off of Germany's exports and that this falling off in exports is itself a consequence of the shortage of man power.