MENACE TO THE WORLD

Evening Post, Volume CIV, Issue 50, 28 August 1922, Page 7

MENACE TO THE WORLD

A GERMAN EXPLANATION.

- Dr. Yon Glaeenapp, vice-president of the Rekhsbank, in the course of an interview with a representative of the "Daily Telegraph" on 15th .July, dealing with the German financial crisis, said: "The German, trade balance is passive. The cost of essential imports is not balanced by the exports. There are no factors which can make up the deficiency in the foreign trade balance, V for German enterprises in former enemy countries have been liquidated, the German claims on foreign "creditors have . mostly not been met, German holdings of foreign securities have had for the most" part' to be disposed of, and the profits from German overseas shipping, formerly considerable, hardly count in view of the loss of her merchant fleet. In these circumstances, she is in no position to meet the enormous obligations imposed on her by the Peace Treaty. The necessary foreign currency has to be obtained by the sale of marks or mark securities, which in turn implies an increase; in her obligations. Naturally, these transactions lead to further devaluation of the mark abroad, and this must ultimately deprive German currency of all value. The Reichsbank has done' its utmost to check this development. It has brought pressure on exporters'to fix their charges^"on the basis of world market prices, so a* to cheapen the acquisition of foreign currency. It has also endeavoured to get - into its

hands foreign currency received by exporters in order to facilitate reparations payments), and it has attempted, so far as its limited powers allow, to check the slump in the mark by intervention on the Bourse.

"Bpt these measures are only palKitives;, amd tuH improvemeat oan only Be obtained, if the intolerable burden of reparations is reduced to an amount which it is possible- to pay «nd if, at the sane tiiM' r Germany receives ait international loan wherewith she can reconstruct, her economic system and increase her production. The widespread idea abroad thai certain- classes in GFer^ mum? • ha>ve> m diriMt. interest in~ the depreciation of the mark and foster it, is not' borne out by the facts. Soms speculators may be profiting thereby, but aid! faseednir persons have lonjr gince reaJieed thai this sTump w a, great nation*! dis«stsr. :it is also wronjf to assume that Germatrnf possesses lar^e holdings, abroad,. as ib wonli have been, impossible for'her to accumulatel these in facet of the very «mfav<*nr3ble> pay balance. That the depreciatjon of the mark is most disastrous ta the world a» » whole,, as well as td Germany, isy" he concludsd, ,"recagni«ed On all sides, but' cannot be too eiten emplrasised."