Untitled

Evening Star, Issue 17765, 13 September 1921, Page 4

Gorman Trails Soom.

Tim Prussian Minister of Trade reports a

manufacturing boom in all branches of industry. Thus ran ono of

hast week’s cables from Berlin. Of five particular industries mentioned specially as flourishing, only ono — the chemical industry-—can he considered as a branch of manufacture in which Britain has not regarded herself as leading the way, for th.* other four were clothing, cutlery, locomotives, and footwear. Neither Bradford, Sheffield, Birmingham, nor Northampton would profess anything but disappointing trade at present. Why is it, then, that Germany’s factories are so exceedingly busy? For one thing, the industrial stagnation in other countries is in many ways favorable to Germany. No sooner did tho Wurth Cabinet accept the London ultimatum on reparations than a revivifying effect on German trade was noticeable. Very satisfactory orders from abroad came to German manufacturer's. There is every sign that tho stimulus of defeat and of a debt which must be. paid before the nation can really consider itself free is having the same effect on Germany to-day as it did on France in 1870-71. Those who aro making a study of German conditions on the spot feel convinced that in Germany there are no doubts at all that, under tho conditions imposed on her, she is bound to prosper.

In the matter of reparations England has been reluctantly dragged at tho heels of a chauvinistic France., And France has made an economic blunder of tho first magnitude which, from her own past experience, she should have known .enough to avoid. After the Franco-Prnssian War the victorious Teutons insisted on payment of the French war indemnity in gold. Although the amount of that indemnity was insignificant compared with what Germany is now required to pay in reparations, yet in 1871 the disturbance caused to trade by the transfer actually created more misery in Germany herself than in France. While the defeated countrjt strengthened mhscle and sinew in toil to make good her losses, Germany indulged in a riot of speculation, inflation of currency set in, with the usual accompaniment of high prices, and a disastrous financial crash was only just averted, though there were many individual failures. But the lessons of history seem to have been lost on France. Wo referred recently to Mr Reginald. M’Kenna’s sage advice that tho Gomans should make their reparation payments in raw materials, and not in manufactured goods. The German comment on tho attack made by the ex'Chancellor of tho Exchequer on the present system of reparation was in the following vein:— Tho Englishman is a business man, and he sees—luckily for us too late—that trust in tho policy of France, who knows nothing of business, but is inspired by ignorant greed of money and racial hatred, has committed him to a plan which will make Germany the world’s factory’.

The above reflection, however, seems to have turned the German city man's head. The whole civilised world at present seems to bo in a state of nerves and highly excitable. There is such a speculative boom on the Berlin Stock Exchange that it is now closed on four days out of the six out of self-protection from an avalanche of business, which seems to be in the nature of sheer gambling. The fluctuations in the value of the mark, which naturally took a distinctly downward tendency since the Wirth Cabinet’s acceptance of tbo allied terms, contribute to the rush of gambling. The Berlin newspapers predict a big crash, and if one comes it looks inevitable that tho German Government would bo involved in it financially. One of the first taxation proposals of the Wirth Government was a plan under which the German Government would appropriate, without compensation, a certain percentage of tho shares of every German company, on which it would receive dividends. It may bo remarked in conclusion that, in effect, this scheme is very similar to our own system, of income taxation in New Zealand, since our own Government may not be inaptly described as a sleeping partner in every business of every size, taking a large percentage of the profits and not liable for any losses.