A FRESH CRISIS

Evening Post, Volume CXVII, Issue 146, 22 June 1934, Page 9

A FRESH CRISIS

ARISING IN 7 GERMANY

HAS HITLER GIV^N WAY ?

LONDON, June 12. Well-informed circles in London believe that Germany is. on' the eve of a fresh economic and political crisis, involving a virtual military dictatorship and a drastic embargo •on exports ' of materials required for essential products. Added to this is a rumour that, when the fast vanishing gold reserve has gone, the Keichsbank may reduce the gold value of the, reichsma-rk. •,

Meanwhile,- however, .political events indicate that Herr Hitler has at last been compelled to give way to the powerful military leaders, and the Nazi system has been deprived of its physical ! basis by the demobilisation of Storm ■Troops for a mouth, ostensibly for holidays. This is regarded as the first step towards-a change of regime.1 ; There is every sign that the Government in future will uphold its authority with the help of the iron-disciplined Reiehswehr and the police, principally the former, who, urider General • yon Fritsch, will be the real masters of Geiv many.. .. '.-.- ..,-...

News has filtered through to London of a bitter struggle for many, weeks between the old bureaucracy of leading generals and big industrialists on the on» hand and Herr Hitler, the Minister of Propaganda, Dr. Goebbels, and the Chief of Staff, Captain Roehm, on the other. •". ; ■ . ■•."'.•■"..

The main issue is thedisbandment of the Brown Shirt ( .rank ;and file, who have recently shown -symptoms •of dis-~ illusionment and restlessness. Several members of the Government are repprted to have • offered! their resignations, which Herr Hitler refused. He only gave way finally to the.persistent demands of General yon • Fritsch, who insisted that the Storm Troops should be disbanded and disarmed. That, in brief, is the secret behind their enforced holiday, which everybody expects will bo extended indefinitely. Captain Boehm has gone on .sick leave, and Dr. Goebbels. alone remains, to fight what appears to be a losing. battle against old-fashioned Prussianism. For it is the "old gang" which will again hold the reins of.power. ••: .' .

There is as yet no question of undermining Herr JHtlor, whose personal prestige continues great. But the Nazi revolution and most-of what it stood for is completely at an end. .

On the economic side the situation is increasingly unsatisfactory, and in some ways desperate, owing to the lack of foreign exchange for : raw materials, The public are becoming alarmed, and it is stated that hoarding of foreign cloth and woollen goods is taking placo throughout the country..

Whether devaluation of the * ma»J» would assist the moribund export trad* is open to grave doubt, unless the dec valuation is very" substantial. Germany's exports have for some time been financed by. the use of various grades of "blocked" marks, available at a discounts Eegister marks, for example, are available for the tourist industry at a discount of 36J per cent.

Nevertheless, it is obviously becoming difficult for Germany to maintain the proteneo that the reichstnark is tied to gold. Consequently a decision must soon be made whether tho gold value will be changed outright or whether a highly complicated nnd apparently illogical system of subsidiary marks,, saleable at different rates, will be continued. It is tacitly admitted that the Eeiehsbank's gold reserve is now too low to enable any central bank to carry on.