DIAGNOSING GERMANY.

Evening Star, Issue 20983, 23 December 1931, Page 8

DIAGNOSING GERMANY.

Tub report which Mr C. S. Thomas, of Christchurch, brings from England regarding Germany's “ swinging the lead ” is by no means contradictory of discussions in print in reputable London financial publications. It appears that the flight of German capital has not been prevented by the law’s embargo. Much of it has, it appears, gone into Holland, where it is employed most remuneratively, and the profits it earns are not liable to the severe German The obverse of this can be seen in big international concerns dealing in commodities in universal demand and of a semi-monopolistic character, which establish subsidiary concerns as distributors in the importing countries, but somehow escape local taxation there to any real degree. This, as we said, is the obverse of the GermaneDutch arrangement. “ These subsidiaries in Holland,” says Mr Thomas, “ show great profits, whilst the parent concerns in' Germany will go bankrupt when a call is made for further taxation.” In the October review of an important London bank Mr Norman Crump analyses Germany’s ability to pay what is demanded of her. He admits that there have been scandalous cases of the extravagant loan expenditure Mr Thomas mentions, particularly by municipalities, but he claims that very recently these abuses have been rectified. Nor does lie exonerate the banks for flagrant misuse of foreign capital. But lie found that though on the surface the German people were leading their normal lives, those with whom ho talked “ betrayed just that air of uncertainty and anxiety as to the future that one finds in a man keyed up nearly to the limits of his endurance. Business men and Government officials gave me the impression that the country was bearing a burden too heavy to be carried more than a short distance.” Franco is the great sceptic of Germany’s professed poverty. “My own observations,” writes Mr Crump, “ during a few weeks wore that if one looked carefully there was definite evidence of poverty.” That evidence was cheap dressing, underfeeding, houses in bad repair, paucity of motor cars, and whole areas, especially in Prussia, going out of cultivation because agriculture is so depressed. Also the middle class has practically disappeared, and the younger generation has nothing to look forward to. “ The fact is that, apart (from the heavy unemployment prevalent even before the crisis, the nation as a whole appeared to be driven by circumstances to the limits of its powers of endurance and to have become aware of the fact.” Mr Crump doubts whether all Germans deliberately wish to repudiate their bond, though some do. “ Bread first; tribute next,” is a motto accurately enough expressing the typical German attitude towards reparations. However, within the next few days the Basle Committee representing the Powers most concerned is to report on the German reparations problem, and the nature of that report should enable a just opinion to be formed as to whether Germany is malingering.