GERMANY’S TRADE CRISIS.

Evening Star, Issue 21824, 13 September 1934, Page 8

GERMANY’S TRADE CRISIS.

There is a real danger of Germany disappearing, temporarily at least, from international trade. This would be disastrous for Germany herself and a very serious matter for other countries. The inherent difficulties which German importers experience in paying for supplies have been enormously increased by the German Government’s arrangements to obtain foreign currepey to meet payments abroad, these being so hedged about as virtually' to put a stop to transactions. The actual necessity for restrictions so severe is not obvious, and in many quarters there is a suspicion that some ulterior motive lies behind a long series of actions by’ the German authorities. Three months ago, during the exchange of notes over the German moratorium, the British Government stated: “The United Kingdom has given ample evidence during the period since the war of its desire to see the restoration of German prosperity and German credit. For this purpose His Majesty’s Government first reduced and then suspended their claims to reparation, and the London market has extended credits freely to Germany and maintained them when other credits wore’being withdrawn. Hut tbeir efforts and sacrifices will have been in vain if Germany herself, instead of co-operating to maintain her credit, persists in a course of action which must destroy it.’’ This friendly remonstrance and warning was entirely disregarded. The prophecy has come true; German credit appears to be nonexistent, and her economic isolation is complete. German importers owe British firms about two million sterling tor past deliveries, about half that sum being equally divided between Yorkshire and Lancashire for partially manufactured textile goods. Further supplies are urgently needed by German factories, but naturally are not forthcoming. In a desperate effort to overcome the difficulty, and incidentally to minimise the alarming drop in German exports, Germany has proposed a barter system with Lancashire, but this has been rejected. The same system of trading is being urged on the Argentine by a German trade delegation, German manufactured goods to be bartered for Argentine wool and grain.

.Meantime the. desperate straits to which Germany is reduced for lack, of raw material are shown by the proposed recourse to substitutes. Here, however, internal opposition to the Beichsbank’s proposals is coming from German manufacturers, who seem to bo as loth to provide for domestic wants as they are to accept foreign orders. The positioji appears to be that of exhausted stocks of raw materials, no means to replenish them, the decline of both inward and outward trade to vanishing point, and a lack of confidence in their' own currency on the part of the Germans no less pronounced than that entertained for it abroad. Under such conditions the probable course of events must engender apprehension in Germany and among the neighbours.