NEW WAR ECONOMY

Greymouth Evening Star, 30 October 1939, Page 8

NEW WAR ECONOMY

WEAKNESS IN GERMANY. [BY CABLE —PRESS ASSN. —COPYRIGHT.] LONDON, October 28. The “Economist,’ surveying the present economic position in Germany, says: “In general, the first measures of Germany’s new war economy, though they have shown a remarkable talent for comprehensive centralised organisation, have clearly revealed Germany’s outstanding weakness. There is a shortage ot fats, metals, minerals, and textile fibres for supplies of which Germany normally relies upon imports mainly from enemy or other countries. More than onethird of the Reich’s total fat supplies are now quite inaccessible. The most severe restrictions have been imposed on the textile industry. In 1938, threequarters of the total supply of textiles and raw materials came from abroad. Now much of this is cut off. The outstanding problem which faces the directors of German economy , arises from the fact that Germany is I dependent upon imports for twothirds of her total annual consumption of iron ore. This fact dominates the whole situation in the heavy industry.” . Statistics which the “Economist then gives reveal that Germany obtained 79 per cent, of her imports of iron ore in 1938 from Sweden, Norway, Luxemburg and Spain, and . 21 per cent, from France. The position of German pig iron and steel production is no better.

Furthermore, it is pointed out that the Saar pig iron and steel outputs which represented 11.4 per cent, and 9.8 per cent, respectively of the total in 1938, have been lost, at least temporarily, owing to the fortunes of war.

“Germany planned to make an appreciable increase in her output of synthetic textile fibres. The output of rayon, which was 65,000 tons in 1938, ‘is to be 80,000 in 1939-40. Even if this is done there will be a shortage of more than 50 per cent, compared with the total supplies available last year. “There is a drive to grow more tood. A 25 per cent, increase in the potato production is aimed at for next year. Hitherto, Germany’s successes in agricultural self-sufficiency have depended largely on a very high consumption of fertilisers. It has now been decreed that the total consumption of fertilisers must be reduced to the level of 1936-37. Compared with 1938-39 this is roughly a decrease ot 17 per cent. During the Great War, the consumption of fertilisers decreased by roughly 50 per cent with disastrous results.” FINANCE MEASURES FAIL. LONDON, October 27. The Rotterdam correspondent of “The Times” reports that the “Allgemeine Zeitung” says the Reich has decided on a policy of taxation to augment the Treasury, at the same time absorbing Germany’s surplus purchasing capacity. This, is tantamount to admitting that efforts to avoid inflation have failed. Further evidence of the failure to keep down prices is the authorisation of payment of bonuses for special work. The Government is issuing 500,000 marks in Treasury bonds to finance improvements in the German railways. WINTER HELP FUND. LONDON. October 27. Winter help collections in Berlin realised 15,000,000 marks, exceeding last year’s total by 5,000,000 marks.