ECONOMICS OF WAR

King Country Chronicle, Volume XXXIII, Issue 4808, 10 July 1939, Page 2

ECONOMICS OF WAR

THE POSITION OF GERMANY. SOME BASIC WEAKNESSES. The belief that Germany cannot stand the economic strain of war for a long period and that collapse would come soon after the outbreak of hostilities is so widely spread that it may be well worth while to look into this matter more carefully, writes a Sydney Morning Herald correspondent after a visit to Germany.

The Totalitarian Greed.

In examining the possible economic difficulties which Germany would experience in the event of war, we may well write off the financial limitation. The very essence of the Totalitarian State lies in the axiom that financial difficulties have a meaning only where means of supply to the State are limited by the barrier of private property. It would be a dangerous mistake to apply to German war economy the principles which regulate commerce and finance in free countries.

Nazi economy goes its own way, undeterred by liberal democratic doctrines, concerning the sanctity of private property, and the freedom of the individual. The regime dictates prices, wages, and profits, and conscripts labour and capital for its war objects.

Material Resources.

The physical limit to the economic capacity of Germany would be reached only when the material resources of the country are actually exhausted. Are there signs that this limit would be attained soon after the outbreak of war? It is well known that Germany faces a serious raw material and food deficit. Despite all endeavours, the prospects of an increase in agricultural output are not encouraging. The plain fact is that Germany still has to struggle against the deficit in agricultural products, which amounted to nearly 2,000,000 tons in field grains for 1938. The shortage of foodstuffs of every description is notorious, and the synthetic substitutes, developed for materials formerly imported, only in a few respects show satisfactory results.

The fact that Germany recently acquired the two territories of Austria and Czecho-Slovakia aggravated the lack of balance in the economic structure. Both countries have a proportionately greater deficit of raw materials and footstuffs than the nuclear Reich. Whereas the Reich can supply about 82 per cent, of her total food requirements, Austria can cover only 74 per cent, of her own needs, and Bohemia about the same amount.

Huge Stocks In Hand.

Judging from these facts, Germany -could not stand a war for more than a few weeks. But we must not forget that Germany has massed enormous stocks of material and foodstuffs for war. It is a carefully kept secret what quantities have been stored but reliable estimates indicate that they would be sufficient- for at least six months. In addition to these reserves, Germany has a secret gold reserve outside the German National Bank, amounting to twenty-three million pounds sterling. Perhaps the most striking limit of Germany's war potential lies in the

internal political situation. Germany's population is known all over the world as disciplined, industrious, and hard-working. The average German is an excellent soldier; he loves his country, and will not meditate over right or wrong when he is called up. But the Army and the officers constitute a State within a State. The Army does not esteem the Nazis, and it is rather doubtful whether it will sacrifice itself for Nazi ideals in the event of war. Despite Herr Hitler's endeavours, he could not make the Army Nazi; it belongs to itself. What is more, even if the Army were to obey completely, shortage of foodstuffs and material would soon demoralise the fighting troops as wtU as the civil population. The Internal Front. It is good to remember that the Great War was mainly decid«d behind the lines, and this will again prove a primary factor in the event of war. Germany will have to defend 'two fronts: an external and an internal one. The external front will probably fight for some time, and it will fight bravely. The only question is how long it will fight.

The internal front is perhaps the more dangerous line —it stretches over Austria and Czecho-Slovakia. Neither Austria nor'Czecho-Slovakia have forgotten the ruthless rape of their countries. Neither of these countries could he "Nazified," and their- people still watch keenly for the political situation that will permit rebirth. There is a violent struggle going on behind closed doors and underground in both these countries. Open rebellion now and then springs up and is rapidly trampled down by the Storm Troopers; but scenes of growing dissatisfaction and resentment are the order of the day. .What, then, is the answer to the question, "How long could Germany stand war?" Financially at least one oi two years, but material resources might be exhausted within six or seven months. The political handicap may become the most imminent danger, and it is this factor which will probably give the world its most dramatic surprise.