FINANCES OF GERMANY

Evening Post, Volume XCVII, Issue 31, 5 February 1919, Page 7

FINANCES OF GERMANY

ABILITY TO PAY UP

AN EXPERT'S OPINION

f NATION BY NO MEANS BANK. RUPT.

Towards the end of November, the German credit on the Swiss Exchange fell to the lowest point on record. It stood at 59.25 francs per 100 marks, as against the normal" pre-war figures of 123.45 francs. This means that the mark, ordinarily worth just under a shilling, was valued at slightly lets than sid. The Austrian crown (krone) had at the same time fallen from 105 francs per 100 to 29 francs per 100; that is from the pre-war exchange value of lOd to under 2§d per krone.

Commenting upon these facts, the financial editor of the London Baily Telegraph wrote: —

While the tremendous depreciation of marks and kronen in neutral countries makes it look as if both Germany and Austria were utterly bankrupt, it will be well not to attach undue importance to these ■ movements in exchange. At one time the pound sterling was at a heavy discount in Holland, Spain, and Sweden, but the reasons were well understood, and it was never suggested that Great Britain was insolvent because Spanish pesetas temporarily commanded a premium of 30 to 35 per cent, over sterling. It is quite true that the fall in marks and kronen is much greater than was' ever the case with sterling—the latest rates received making the parity for German marks in Berne 38.80 for the pound, while in Stockholm the price in Swedish currency worked out at 75.20 Austrian kronen 'to the pound, against the par of 24 kr. Both countries are no doubt doing their utmost to obtain food from outside, and the necessary payments, of course, contribute to a decline in the exchange. As regards Austria-Hungary, it was shown recently that the joint debt had risen to about £5,000,000,000, that little or no provision was being made for its service out of revenue, and that with the disintegration of the Dual Monarchy a state of bankruptcy appeared inevitable. With Germany the situation is. different. The resources of Germany are very great, and the loss of her colonies means nothing, for, with the exception of SouthWest Africa, they never paid their way, and practically added nothing to the Imperial revenue. Although before the war Germany's total wealth was estimated at about £20,000,000,000, the value of her mineral resources alone was computed at no less than £250,000.000,000. The output of coal in 1913 was 278,000,000 tons, and in the same year 19,292,000 tons of pig-iron, and 14,000,000 tons of ingot steel was produced. In addition she possesses valuable copper, lead, and zinc mines, and still more valuable deposits of potash, the output of potassic salt in 1913 being given as 13,306,000 tons. From an agricultural point of view Germany has also made enormous strides during the last thirty years, and until quite recently it was her boast that she was self-supporting. Thus, in 1913 the production in tons of a few staple articles was as follows:—Wheat 4,656,000, rye 12.222,000, oats 9.714,000, potatoes" 54,121,000, hay 29,184,184,000, sugar 2,618,000. Next, there is an important asset in the shape of the State railways, which, bring in a net revenue of between 50 and 60 millions, a year—in 1913 the excess of income over expenditure was £53,300,000. Lastly, there are the State and communal forests, covering an area of some 17,000,000 acres, which also produce a considerable revenue.

The Allies will not forget that there has been no physical damage to im PJ» r the value of property in Germany. The moment the war looked like taking place on German soil the Kaiser bolted, and the authorities threw up the sponge. The return of Alsace-Lorraine to France will, of course, deprive Germany of large coal and iron ore fields, and it may be considered in the French claim for damages. Again, the loss of her Colonies must, be taken into account, since they possess' a capital value which will, be greatly enhanced when they are no longer under the heel of the Prussian jackboot. But Germany will still have an enormous bill to pay for reparation and restitution to Belgium, France, Rumania, ourselves for shippping losses and air-raid damage, as well as Italy and Serbia.

To attempt any calculation at present is quite impossible. Belgium and France, it is understood, have kept full accounts of the actual loss from damage and pure robbery in those two countries. We also know what our shipping losses have been, and the damage incurred by bombardments from the sea and air raids. We have seen an estimate of £1,500,000,000 as representing the total of ascertainable damage suffered by the Allies, including £640,000,000-for ships and cargoes sunk. This, of course, does not take into account anything for loss of life or for. the cost of the war, which latter, at a low estimate, represents some £15,000,000,000 for the Allies.

That Germany can pay anything like £15,000,000,000 in cash is, of course, out of the question. She has already created a debt of her own for about £6,000,000,----000, the service of which she may not find it easy to meet. But with her large resources, what she cannot pay the Allies in cash she can be made to pay in labour and materials. Experts believe that she could well pay the interests on an indemnity of some £5,000,----000,000 at' least, and, if necessary, she must hypothecate her mineral and other resources until the debt is redeemed. Germany will, of course, pretend that such conditions are impossible. But what has been found effective in Turkey and Greece might well be repeated- in Germany, and the desire of emancipation from : the tutelage of the Allies will hasten her endeavours to pay up. The idea that Germany is bankrupt should not be entertained for a moment, and it is only just that she should be made to bear the burden of her crimes against humanity, even if it requires 50 or 100 years to get rid of it.