ECONOMIC WARFARE

Evening Post, Volume CXXIX, Issue 15, 18 January 1940, Page 9

ECONOMIC WARFARE

EFFECTS IN REICH

EVIDENCES OF STRAIN

RAW SUPPLIES SHORT

INTERRUPTION OF IMPORTS

(British Official Wireless.) (Received January 18, 11 a.m.) RUGBY, January 17. Economic warfare was discussed in both Houses of Parliament today. In the House of Lords the subject was raised by Lord Cecil, who was Minister of Blockade in the last war. In the House of Commons the Minister of Economic Warfare, Mr. Cross, made a statement on the progress of the attack upon the enemy's industrial, financial, and economic structure, aimed at crippling arid enfeebling his armed forces, and on the results so far observed. Mr. Cross repeatedly emphasised the desire of the British Government, so far as is consistent with the proper exercise of belligerent rights, to spare inconvenience and obviate hard- j ship to neutral interests, and instanced negotiations of different kinds now in progress with fourteen. neutral Gov--1 ernxnents as /evidence of the British Government's good will. 'The Minister began his review by - recalling that the Allies, were fighting a country in which the whole people had been moulded and hammered into a vast militarised economic machine deliberately prepared for the waging of war. That fact, he pointed out, made Germany technically stronger than in the last war. He added the important reservation that it also made her more brittle than before. Accordingly he prophesied that economic events in Germany would take a different course from the last war. FEELING THE PINCH. This forecast was given point by signs he was able to report later in his speech of the effects of economic warfare on Germany so far. He claimed that at the end of four and a half months of war Germany was experiencing the same degree of economic strain she was feeling after two ' years of the last war. This was reflected in day-to-day conditions of life. Rationing had already been extended to clothing and soap. The severe cold had created demands under the weight of which coal distribution had broken down. There were already sig--nificant indications of an abnormal desire on the part of the German population to convert currency into goods—a sure sign of fears of inflation. A black -market in food" was growing up in a ■number of centres. The shortage of petroleum, iron, copper, wool, oils, .fats, and other commodities was making itself felt in industrial conditions. Since export was given priority over ,the domestic market, it was, Mr. Cross ■ argu6d, the export field which provided,, the best measure of Germany's industrial embarrassments, and he cited as an example the fact that Germany was now exporting motor-cars and bicycles to neighbouring neutrals without, tyres. He said he had reports that important steel works in Germany had suspended operations through lack of raw materials. RATIONING OF CLOTHING. - In the basic industries there was frequently a shortage of material. Practically all Germany's supply of raw cotton and 85 per cent, of her wool ' were obtained normally from, overseas, and the" present textile situation in Germany was such that rationing had had to be introduced for clothing of all kinds. He produced a ration card for clothing issued to persons. in Czechoslovakia. It contained a hundred coupons which were to last a year, but j the recipient had to give 60 coupons for j one suit, two coupons for a handkerchief and from 20 to 30 for a shirt. Therefore it was pretty clear that by the end of a year a man would not be able to acquire a great deal on this ration card. Regarding contraband control, the Minister said that, thanks to the naval supremacy, few ships were evading control and virtually the whole of the German imports which could be controlled by this weapon had been interrupted. CUT IN OVERSEAS EXPORTS. Coming to the machinery for seizing German overseas exports, he said that importers overseas had little inducement to order German goods once they were subject to detention, and there were good grounds for thinking that the Allied decision to make these exports subject to seizure as a reprisal for Germany's illegalities at sea had sufficed in itself to cut off the over- j ■ whelming bulk of her overseas exports.! The result was that the quantity of goods of German origin unloaded after examination was small and was likely to remain so. At the same time, Germany was developing devices to camouflage those goods, and he gave fair warning that necesary steps were being taken to check that traffic. On the more positive side* of economic warfare, the Minister spoke of the close co-operation with the French Mission on economic warfare in London and with.the Dominions and the Governments of India and the^olonies. He also described purchases being made abroad designed to forestall the enemy or to compensate neutrals for trade losses. He declined to give the total figures, which, indeed, would be misleading, but said that very considerable purchases had been made from many countries, in some cases repre- . senting quite new trading connections.