THE IMPERIOUS DEBTOR

Evening Post, Volume CIV, Issue 10, 12 July 1922, Page 4

THE IMPERIOUS DEBTOR

The financial-economic situation is so many-sided that it cannot be contended that a debtor has at all times the worst of the game. In fact, it may almost be said that the German debt is being turned by Germany into an economic battering ram, by means of which German goods may yet be able to force their way even into the strongly protected markets of the world. According to recent cabled news, the British Prime Minister, Mr. Lloyd George, is alarmed at the prospect of "the German people working for wages the purchasing power of which is only 40 per cent, of the purchasing power of the wages paid to the British people." If creditor countries keep a debtor country in such a condition of indebtedness that the debtor people are compelled to out-work and under-cut the peoples of the creditor countries, and if the creditor countries have no means of being paid except in goods manufactured by the debtor people, then ' the creditor countries are certainly entitled to view the situation with some misgiving. Their problem is how to agree upon an amount of debt, and a means of payment, that will not cripple the debtor country, nor reduce it to straits that will cause its products to overwhelmingly invade outside markets ; and their problem is more than that, because even if they fix a payable debt and a satisfactory method, of payment, they still have to deal with internal crises that may be engineered within the debtor .country by its commercial magnates, who may possess .the power to manipulate either a sham or a real financial crisis, and who may be motived by the idea that bankruptcy tactics are worth while as a means of ultimately evading debt-collection, or of working political changes (e.g., restoration of monarchy) that will be favourable to the magnates' manipulations.

Point is given to the latter contingency by the Berlin newspaper Freiheit, which suggests that the cause of the collapse of the German mark is internal, not external, and that the collapse has been.deliberately engineered by reactionary German capitalists. Whether the collapse of the mark is real, whether it has been engineered by German monarchists, or whether it is part of a debt-evading manoeuvre to which Germans generally are privy, the problem of the creditor nations remains a perplexing one. British anxiety not to over-do, and French anxiety not to under-do, the creditor's part, have together contributed to a policy of drift, the outcome of which is uncertain. The German assassination campaign, which seems to be clearly the Work of monarchists who do not wish the Eepublican Government to find a way out of the tangle, and perhaps also the work of capitalists who are prepared to juggle with national bankruptcy, is evidence in support of the theory of manipulation of the situation by reactionaries. At the same*.i__e, it is hard to believe that men like Stinnes would willingly jeopardise stability—financial as well as political—at the risk of the whole situation passing into the hands of the Reds. Are they so sure of their German people that they can safely go down into the pit of repudiation, confident in their power to rebuild Germany to their own liking, after bringing upon Europe a financial crisis the like of which is unparalleled in history?

Until the tragedy of the mark has evolved into something finite, opinion as to the peculiar economicpolitical game being played withiu GerrAaiiy must remain uncertain. Bat etiougji-'is manifest to show that, in given circumstances, the debtor can be a powerful person.'ijje in tlio world's ftffai.., Tho fc.e< ditos .docs not alw,. yjs Ms ,oa .the

debtor's shoulders, and call the tune. The reverse may be the case. A debtor may create alternatives that a creditor may shun, and just at present the world's creditors seem to be at least as worried as the world's debtors. Which is the greater calamity—to be paid or not to be paid? If payment of a creditor means the invasion of his markets, is he a gainer or a loser? And if the whole fabric is so interwoven and so delicately balanced that creditor and debtor walk the same tight-rope with the same pit of bankruptcy underneath, will the world be forced eventually to mutual cancellation of debts in some cases and to international loans to cover such indebtedness as remains?