GREATER GERMANY

Hauraki Plains Gazette, Volume 48, Issue 2886, 29 March 1939, Page 6

GREATER GERMANY

ECONOMIC OUTLOOK NEED FOR EXPANSION WHERE WILL LEADERS TURN? “ SPECULATION TN BERLIN ” There is much speculation in Berlin as to whether the Third Reich will pause in 1939 to digest its spectacular acquisitions of the past year, or whethei* the leaders will launch the country on a new adventure, writes Verginia 'Cowles in the Sunday Times.

There is no doubt that the German economic machine is undergoing severe strain. The excessive tempo of armaments and public construction has taxed its resources in men, materials and equipment far beyond its normal capacity. If the pace were to slow down by as little as 10 1 per cent, many of the country’s present difficulties would be removed. The labour problem would be eased, and the country’s critical export situation, which is far more precarious than the internal financial situation, would be improved.

The bill for the extravagant expenditure of the past few years has still to be footed. This means that the people will be required to make even more sacrifices in terms of restricted consumption and longer working hours. The recent territorial »acquisitions, however important they may prove in the long run, have up to now imposed fresh liabilities Austria and the Sude'tenland added more than 4'3,000 square miles to the old Reich’s territory—an increase of nearly one-fourth. 'Of still greater importance was an increase in population of ten million persons at a time when not only Germany’s military power largely depends on her numerical strength but when her economy, spurred on by an uninterrupted flow of public expenditure, demands more labour.

Raw Material And Food

In regard to natural resources Austrian iron ore and timber and the Sudeten forests are a welcome addition to the inadequate raw material base of Field-Marshal Goering’s FourYear Plan. On the other side of the ledger, however, must be placed the severe strain which the Reich has undergone in supplying this newly incorporated territory with raw materials. In' spite of the intensive exploitation. of the famous “Erzberg” in ‘Styria, the reconstruction of Austria absorbs at present more iron and steel than can be provided by the current iron ore output of the Erzberg. And of Greater Germany’s trade deficit of 450 million Reichmarks in 1938 Austria alone accounts for 2.00 million Reichsmarks.

Germany’s food problem has also been accentuated by her 1938 acquisitions. At a time when her agriculture is passing through a difficult phase, the strain of feeding the increased population is severe. This has been aggravated by the fact that the lavish construction programme has robbed German agriculture of many of its workers (the official estimate of the flight from the land is 800,000 since 1938), and is thus defeating the very purpose of the State’s agricultural “production battle.” Moreover, the western fortifications have withdrawn wide stretches of arable land from agricultural use, adding not a little to the official acknowledged decrease in grain planting during the past year. The main advantage of Germany’s 1938 advance, therefore, must lie not in its immediate gains but in the “open door” through Austria to South-Eastern Europe. It is apparent that unless Herr Hitler slows the country’s rapid economic pace there will be a demand for further expansion. What direction this would take it is too early to predict. The Export Problem

Already Germany has established an indisputable economic hegemony in Central and South-Eastern Europe. The extent to which the Reich has closed its pincers on crippled Czechoslovakia is remarkable. Probably few people realised that Czechoslovakia — after making all the required political concessions to the Reich —would become economically dependent on Germany. This development has found its most startling expression in the construction of an extra-territor-ial corridor autq-highway through Czechoslovakia —a juridical monster from the viewpoint of orthodox international law. In general, by means of control over the Czechoslovakian transport system—highways, railroads and canals —'Germany will utilise to her own advantage the economic resources of the country. The new trade agreement between 'Berhn and Prague, signed at the end of 1938,

is convincing evidence of the extent to which easy-going Czechoslovakian economy is to be geared up to the breath-taking pace of the Third Reich.

But all the south-eastern countries taken together cannot solve Germany’s export market problem. Although they are spoken of as Germany’s most “natural market,” in. the third quarter of 1938 they absorbed only 10.4 per cent, of her exports. The British Empire took 12.4 per cent. It is also important to remember that the south-eastern market does not yield free exchange with which to buy American cotton or Malayan rubber. The Ukraine The direct access which Germany has acquired to such countries as Hungary and Jugoslavia is, of course, an important addition to her strength in resisting a food blockade. But, with the exception of bauxite —the basic material for aluminium—a moderate quantity of copper ore from Jugoslavia, and Rumanian oil, the southeastern countries cannot make any decisive contribution towards meeting Germany’s raw material deficit. Even the Soviet Ukraine, were it to pass one day under German control, could riot remove this shortage; apart from when linked with the hopes for the

Ukraine possesses only the iron ore deposits in Krivoi Rog and the manganese ore of Nikopol. The Ukraine does possess, however, wide stretches of the most fertile land in Europe. The main conclusion to be drawn from Germany’s present economic situation is that the gains of 1938 can be listed on the credit side only when linged with the hopes for the future. 'For this reason the country’s rulers may decide to continue to drive the machine at its present rapid pace, particularly as the Western Powers are caught in the throes of rearma.ment. Last, but not least, is one important psychological factor —that the sacrifices demanded of the German people can no longer be attributed to the Versailles Treaty. The Versailles dragon has been slain; and it may be considered wise to find a substitute.