INDUSTRIAL REVIVAL

Evening Post, Volume CI, Issue 102, 30 April 1921, Page 2

INDUSTRIAL REVIVAL

CONDITIONS IN GERMANY

DESPERATE STATE FINANCE. A report on the industrial and economic situation in Germany is issued from the Department of Overseas Trades. It ' has been prepared by Mr. J. W. F. Thelwall, Commercial Secretary to His ' Majesty's Embassy^ Berlin. On looking back over the paßt two years, and more particularly the year of 1920, it is impossible, the report states, not to be struck by the evidences of improvement in all departments of public and private life in Germany, with the important exception or State finance. A striking passage in Mr. Thehvall's summing up^oi his general review of the situation h the following:— r "German trade and industry are sound enough in themselves; their, adaptability li&s seen them through the great hardship > of two exceedingly difhcult years, and, as far as in them lay, they have removed dc surmounted the obstacles. whioh impeded them/ There was, however, one danger which they were not able to remove—the bankruptcy of their country. Last year this was one of several factors which warranted the assumption that Germany was threatened with collapse; this year it is the only one, but it is not likely to bring about thU disaster, as neither Germany herself nor anyone else has; any interest in its occurrence." ' ' ENTERPRISE UNDER NEW REGIME. The authority of the • Government, though it still shows signs of weakness, has, the report states, steadily Ucreasedj and the Socialists seem to be a greater element o£ strength now that they are no longer themselves in the Cabinet. After passing through the upheavals, distresses, reverses, and the short period o;' unhealthy whirlwind activity of 1919, and o£ the beginning of 1920, "German trade anfl industry were plunged into suddeii stagnation :n March, 1920, which, though its critical stage is probably past, ig still | continuing in a modified form. One cannot, Mr. Thelwall observes, but admire the skill with which traders and manufacturers not only survived thesiV trying times of violent fluctuation and disturbances, but did good business in spite of/them. The inoreases in capital wnich set iii t so vigorously .during 1919 had not diminished in 1920, and, though they wore in the main due to! the depreciation of the currency on the one hand, and the rise in wages, running expenses, cost bf material, etc, on the other, nnd were not necessarily a sign of prosperity, yet the high dividends paid would seem to tell a different story. . These results refer to the year 1919, and the German manufacturer and merchant, when confronted with these brilliant figures, remarks: "After all, it is only pataer!" When the story of 1920 comes to be told, a different piotur<j may be presented; the results will not be apparent until a later date. While without exception company reports at the end of 1919 ooncluded with the words; "There are plenty of orders on hand," as a rule the.1920 reports did nob ', refer to current business or future prospects. That might be due to the stagnation whioh had prevailed throughout the greater part of the year, and which had only partially eased off with the beginniag of the winter. Combines within the country and cooperation with foreign groups are noted as the two ohiei features of Germany's industrial activity during 1920. The inclination to create syndicates, already marked before the .war, became much stronger during the last two years, and spread to every branch of industry and . of trade. There have been many changes, but it is already evident that the bulk of the iron, steel, and coal industry will be held by a. few groups led 'fey dominant personalities, and it only remains to ha Been how few will finally share" the advantages and burdens of control between them. While these particular combinations are, perhaps, _ tho_ most striking on account of their size and power, similar ones are in existence or in process of 'ormation throughout the so'intry. Tho old, powerful chemical combine has been strengthened and prolonged; shipping is really controlled by two companies only; ' the electric lamp industry, the motor-car indijstries, the oil and fat industries, have formed trusts of their own; and the breweries are well on the way to coalesce completely, eto. The great banks not only participated in the transactions connected with the creation of these syndicates, but are busy opening new branches and buying up provincial houses. FOREIGN TRADE AND AGREEMENTS. . • . As to foreign agreements and foreign trade, it is pointed out that a series of arrangements, additional to the credits granted to the German Government and otherwise, were begun. They consistad, either in giving the foreign firm a direct interest, thougn not a controlling one, in the German concern, or in forming a company abroad in which, several Gerrran companies participated. This has beeD. the case particularly in the oil and margarine industries with the Dutoh, in the electrical and textile industries arid in shipping with the Americans, in the rubber industry with tho British, and jin ores with the French. These foreign alliances were intended not only to facilitate the import of materials with the aid of foreign currency, but also to find a field in which the resulting' manufactures can be sold, because exrjort is now mora than ever an imperative need of German trade and industry. j While, the German banks and the financial side of Gorman industry are thus in at least a satisfactory position, sight must not, the report cays, be lost of tho fact that it has been possible to achieve good results on a comparatively, small production. Some well-placed foreign orders, some successful speculation in exchange, and a firm makes a handsome profit, though it may liave been working short time most of the year. This explains how the evidence of prosperity on the one side is balanced by. Labour distress on the other. ' / i ■ The 3tate finances are dealt with in considerable detail in the report.- "Tho - public finances," it is remarked, "are in that desperate state whicb must necessarily follow on four ,years of gambling, followed by two years during which revenue could not meet expenditure. Tho root of the evil is beyond doubt the incessant flow of paper money which ever swells the note circulation. The possibility of putting a stop to this fatal increase has been the subject of much discussion without any really positive result being reached; probably there is no specific remedy, and in the interests of a further recovery of Germany it is more important to avoid anything which would aggravate the malady ttan to seek for a panacea with which to hea! it at onoe."