The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” FRIDAY, JANUARY 12, 1940 ECONOMIC WARFARE

Gisborne Herald, Volume LXVII, Issue 20143, 12 January 1940, Page 6

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” FRIDAY, JANUARY 12, 1940 ECONOMIC WARFARE

Figures published to-day give the latest results of the British contraband control system under which seaborne cargoes are examined with the object of confiscating essential supplies which might be destined for Germany. This is only one aspect of the blockade which has been instituted by the Allies, and not by any ■means the most important, but it serves to illustrate the extent to which Germany's vital trade is being cut oil'. Since the commencement of the war the British contraband control has seized no less than 544.000 tons of cargo destined for the enemy. These goods, it must be remembered, came exclusively from Allied or neutral vessels. It takes no account of German ships that have been sunk, scuttled, or capturpd nor of seizures by France. It represents a form of economic espipnage and the resultant interception of shipping. It is an indirect method of interfering with Germany’s trade and the results indicate not only the success of the system but also the steady diminution in the quantity of goods which have been destined for Germany. In the first two weeks of the war, the contraband control seized 170,000 tons of goods and in the first 10 weeks the total was 427,000 tons. In the last eight weeks, however, the most intensive search has revealed only 117,000 tons of contraband and in the last week for which returns have been given only 6200 tons were confiscated. The inference is, not that the control is less effective, but that neutral exporters and shipowners have realused the futility of attempting to' despatch cargoes to Germany, either directly or indirectly. It is to be assumed that control has been tightened up in the light of experience and as the new department became more efficiently organised. Notwithstanding this, the average seizures fell from more than 42,000 tons a week in the first 10 weeks to an average of less than 20,000 tons a week in the last two months. These figures, of course, do not relate to Germany’s ,normal imports or indicate the extent to which they have been disrupted. Normal imports have been stopped by other means, and the figures from the contraband control stations merely represent what neutral shippers have tried to get through by various forms of subterfuge. As a result of these attempts at deVious trade the Allies have secured for their own use more than 1,000,000 tons of cargo that was destined for Germany and for which Germany had either paid or contracted to pay. Germany has thus been depleting her already scant foreign credits to provide goods for her opponents, and it may be assumed that even if she and her suppliers think the risk of running the blockade is worth taking other factors have operated to reduce this form of trade.

This interception of imports for Germany is only one aspect of the economic war. German shipping itself has virtually been driven off the seas and neutral cargoes destined for Germany are being steadily restricted and regularly seized by the Allies. Her sea-borne import trade, therefore, must be almost negligible, whereas that of the Allies continues with little interruption. Another point is that whatever losses have been sustained by the Allies are not irreparable while supplies that were intended for Germany but have been lost to her cannot be replaced. Now the Allies have attacked German trade from another angle and are seizing German exports destined for neutral countries. This step was taken in reprisal for various breaches of international law by Germany, and although at the outset it was subject to considerable criticism in neutral countries it now appears to be recognised generally that the measure was warranted. This reduction of German export trade means that her 'capacity for building up foreign exchange with which to purchase imports is still further restricted. Each step that has so far been taken, therefore, is cumulative and interlocking and it must be apparent that the overseas trade of Germany, despite the protestations she continually makes to the contrary, must be more and more adversely affected with the passage of time. There still remains, it is true, Germany’s trade with her continental neighbours which, in the nature of

things, cannot be subject to the same supervision and restriction. It would be a mistake, however, to assume that this trade can continue normally. Germany’s first handicap here is the same one of shortage of credits without which no exporters are likely to supply her. In peace-time it might be possible io build up credits by a rigid control of trade or to trade on a barter basis, but these methods are restricted by war conditions. In the first place, the German industries which normally contribute chiefly to her export trade are now concentrated on the manufacture of munitions. A second factor is that the Allied blockade is preventing the importation of raw materials which form the basis of much of the export trade. Up to this point, therefore, a serious blow must have been struck at Germany’s trade with her neutral neighbours, but that is not the end of the position. It is possible for the Allies, with their infinitely stronger credit position, to undersell Germany when it comes to supplying goods to neutrals and to out-bid her in the purchase of neutral exports. In this way Germany’s last avenue of trade can be effectively closed and it becomes more clear than ever that in the economic war she is fighting a losing battle.