PAYING THE PRICE

Evening Star, Issue 22228, 4 January 1936, Page 16

PAYING THE PRICE

GERMAN REARMAMENT ie “STATE BOOM " ABATING 3t 16 re One of tbe most popular Nazi propato ganda films stresses as an illustration s- of the suffering brought upon the Gerrs man people by “ Marxist treason ” long queues of housewives standing be- ., fore grocer shops to obtain ' meagre d supplies of foodstuffs, writes Frederick s T. Birchall from Berlin to the Now York 1 Times.’ n Its showing never fails to evoke sym:e pathetic murmurs from all who rernem;s ber the misery of the war-time blockie ade and the long post-war period of )f inflation, starvation, and utter want d that followed. it Well, the queues are visible again ’ s before butter stores And some meat ,t shops, and this time the waiting women evince considerably more testiness of a temper. Complaints are loud and pro,t longed, and quarrels about places in n line are more bitter. Sometimes they , r even reach the hair-pulling stage, d In the old days it was for the Fathers land in its greatest need that the people £ endure. To-day women want to know d what they are sacrificing for. Who is assailing Germany now? It is not at all clear.. There is a policeman handy by most e of the butter shop queues, but even d he cannot explain. Nevertheless, his r presence is highly desirable—if only to r keep off photographers. Anybody who e attempts to photograph one of these a queues is promptly arrested. Obviously this is not the same situaj. tion as that produced by the war-time blockade. The butter shortage and the (. less intense pork shortage _ are merely symbolic of the growing difficulties of German economy. But who made them, , and what is the attitude of Germany’s , present rulers towards these difficulties r resulting from their policy? j Dr Joseph Gbebbels, the Minister of 3 Propaganda, said recently We are making history, not butter.” General Hermann Goering, the Air Minister, j. announced: “ The iron National Socialist will bends matter. We will not , capitulate before a mere shortage of , butter or a small matter of too few 3 Pigs.” 5 DISSATISFIED GERMANS. , 5 This sounds well. Nevertheless, if J one were to imitate Diogenes and tout I Germany with a lantern seeking satis- • fied Germans the search would disclose " exceeding few, because these hardships ' have been brought upon the German people by one sole aim—the sacrifice of i all other interests to the speeding up ’ of German rearmament. ' And while the populace is in favour • of German rearmament in the abstract, r the' need for this excessive haste, and ’ sacrifice in bringing it about is not so • apparent. Why should German families ■ be restricted to a quarter of a pound of butter a day and have to wait houi-s in line for that merely to speed up re-- ' arament? Frau Schultz cannot see it. That the National Socialist rulers themselves, while “making history” 1 and ' contemplating their own “ iron 1 will,” are conscious of this growing discontent with the * effect of their policy is certain. An indication may bo seen in the fact that although Adolf Hitler at the beginning of his rule announced his. intention of submitting the results to a popular vote annually, this year is drawing to a close without any sign of such an ‘ ‘ election ' ’ as has hitherto been regularly staged. The fact is that Nazi economic policy is still highly contradictory in its manifestations and uneasy about the sum both of its results and its prospects. Oil the one hand there is an undoubted domestic boom resulting from the creation of one of the world’s greatest armaments, plus the cleaning up of cities, the erection of monumental public buildings, and the construction of super-modern ■ auto roads. ' . “ ERSATZ ” INDUSTRIES AIDED. The domestic raw material market has been wonderfully stimulated thereby, and the creation of new “ ersatz ” (substitute) industries built upon national credit has had a further stimulating effect. ; The national income has gone up until industrial profits again exceed industrial losses. The prices of agricultural produce have improved, peasants’ debts have been reduced, national savings are rising, and / even if the per capita wage is still at the lowest level of the depression, unemployment has been greatly reduced, and the dread spectre of having no job to-morrow has been taken from the worker. / ' The picture is perhaps not quite as pretty as it is spread here on paper, because the ; countless levies contmu- ■ ously made by the party and the State somewhat dim the brighter colours. Yet on the whole there has been improvement. However, the price being paid for this boom is now beginning to strain the national resources. That is the other side of the picture, and it is { shown in the queues now lined up be- 1 fore grocery stores and butchers’ shops. The boom has been financed by the j virtual cancellation of .foreign debts: which has spelled the end of foreign : credits; in part by the issuance of bil- j lions of marks in State IGU’s, which ( now clog the entire credit and banking systems. Nobody beyond the innermost governmental circles knows how big the J total German debt has becomb. Foreign estimates vary from 17,000,000,000 to 20,000,000,000 marks. Officialdom , denies that it is so large, but refuses * to publish a Budget, and such statis- s tical material as is issued is put out j wholly in the service of propaganda, and. therefore, may be neglected. ( THE DILEMMA. I Nevertheless, it is sufficient that this c .debt is admittedly so large that it is £ beginning to approach the danger ( point. The country will soon be faced £ with the choice of slowing down expen- j ditufes or taking the risk of outright s inflation: , National Socialist spokesmen, especi- j ally the Radicals, who just now are in c the ascendant, express contempt for purely “ capitalistic ” considerations, and propagate an “ economy of faith ” c that does not depend on money. v But tbe more conservative elements, ; led by Dr Hjalmar Rchacbt. President t of the Reichsbank and Minister of Economics, supported by men theoretic- ; ally so widely apart as Bernhard Koeh- 'j ler, chief of the Nazi Party’s Economic c Commission, and Peter Kloeckner, head j of the great iron works in the Ruhr, c agree that the time has come when tbe “ State boom ” must taper off and, if a the present volume of business is to be r maintained, must be carried on in in- t creasing measure by private enterprise. J ( That tbe “ State boom ” is already ] ; tapering off was openly stated by Mr i Kloeckner in a recent address to his 1 stock holders. The larger part of the new army building has been completed, n be intimated, and tbe i railroads are already curtailing their orders; there- t fore, future domestic employment is becoming “ rather uncertain.” t FALLING PRODUCTION. / Statistical indices confirm that view, a

Industrial, activity in, “ production goods,” which rose at an .unprecedented rate in the earlier stages. of rearmament, is now beginning to subside. The index covering “ consumption- goods ” has dropped' considerably within the last year, although it is again showing a slight rise. . ■ But how to accomplish the transformation of'' the “ State boom ” into a ‘ ; private boom ” P At the peasant rally on the Beuekeberg Hitler proclaimed 'the principle that in economy, as in other things, there must be a' plan and one man must command. Yet even among tried and true Nazis there are arising doubts that this regimentation, so dear, to Nazi hearts, will solve the problems involved in such a transition. They have produced the retort from Mr Koehler that “ free, economy, private initiative, and personal responsibility are not demanded of us by business; it is we who demand them of business.” This may or may not indicate a relaxation of the pressure upon business. But even if it does there remains the problem of what to put in place of the “ State boom,” and how to .finance it. The. radio industry'is an example of State-expanded industry. It is already in growing difficulties, with bankruptcies increasing. There are fears that the auto industry, which has greatly expanded under the stimulus of army orders, likewise is facing a difficult time. -Whence will come the purchasers to replace the State or State-controlled agencies when ‘these cease to buy ? ■ There is the rub. Despite official announcements of increased national income, especially working income, retail sales are beginning to go down. In September they were 4 per. cent, below last year. SELLING OUT JEWS. And the whole situation is being gravely complicated by the politically enforced liquidation pf Jewish enterprises, depressing all values and unsettling .even real estate and credit markets. It is revealing not the transfer of Jewish business to Gernian competitors, but its simple disappearance. Mr Kloeckner in his speech advanced as the only possible solution of these difficulties an increase in exports, arid even expressed optimism over German chances in that respect because of a general revival of world trade. But the boycott of German goods, representing the world’s resentment against Nazi policies, still persists, and -has even been intensified recently because of the intensified- application of those policies. The vast export subsidies that are consuming Germany’s industrial , substance ' still force her exports slowly upward, yet, even so, she. is able to achieve a favourable trade balance only by throttling imports,, thus creating shortages of , raw fnaterial, shortages with a resultant hampering of px-ivate industry and the appearance of those queues of women before food shops at home. Shortage increases prices despite all official control. And private industry, with an increasing shortage of materials and declining Government stimulation, is hard pressed. Unemployment, which was to be abolished this .year, is increasing again. The Institute for Business Research estimates that an increase of more than 1,000,000 is wholly within the range of possibility this winter. With unemployment labour unrest also naturally increases. There have already been some incipient strikes, although the public are not permitted to know anything about them. And public dissatisfaction is undoubtedly growing. It is unorganised arid leaderless, but it is rising like ground water, which, unless chocked in time, undermines even the most solid foundations. How eagerly in these conditions eyes turn towards the Olympics next summer and the flood of foreign shekels they are expected to bring in. The shekels may be slim in comparison xvith what they might have been, but they are magnified, by Germany’s dire need.