Manawatu Evening Standard. MONDAY, AUGUST 29, 1938. GERMAN TRADE DRIVE.

Manawatu Standard, Volume LVIII, Issue 231, 29 August 1938, Page 6

Manawatu Evening Standard. MONDAY, AUGUST 29, 1938. GERMAN TRADE DRIVE.

Ihe , economic difficulties which have confronted the Nazi Administration of Germany in successive winters have not diminished with the approach of the Continental autumn. Added to the already dire struggle to maintain even a moderately good standard of living is the pressure arising from the large-scale military operations, and the motive of prestige is no less important than in pre-war years. Tlie extension of external trade is being tackled with thoroughness, and it is apparent that efforts are to be redoubled to secure for Germany a greater proportion of the world’s trade. Lr. ifunk, the Minister of Economics in succession to Dr. Scbacht, seeking to allay concern over unfavourable movements on the Bourse, declared that the State would “relentlessly deal with the smallest attempt to disturb the' mighty work of reconstruction.” Since then, he has announced that he intends to visit the various Balkan capitals with a view to launching a trade drive in South-East Europe, aimed at making Germany the entrepot of Balkan goods, placing her at the head of an economic block extending from ,the Ithine to the Black Sea. Such a move was foreseen as far back as June, when the Little Entente Powers —Rumania, Yugoslavia, and Czechoslovakia —moved for a common policy to check German penetration in the Balkans, at a time, too, when Britain and Turkey were significantly liningup with these small but highly important nations. Nor is German attention being paid to the Continent alone in an endeavour to impart strength to a weakened external trade situation. Aspirations to capture the trade of South American countries have in large part been realised, though not without difficulties. An impasse was reached between the Reich and Brazil at the end of -June, when the Bank of Brazil ceased to buy so-called compention or barter marks available from Germany’s transactions with Brazil, and Germany, by way of retaliation, declared she would buy her coffee, tobacco, meat, oranges, and bananas elsewhere. However, the Argentine and Chile remained in the scheme, the latter agreeing to extend a clearing arrangement to include Austria. German purchases of Chilean timber, too, had at that time increased at/ an exceptional rate, a contract between Krupps and the Chilean Gov ernment envisaging an annual trade of up to 000,000 tons, destined for wood pulp.

The Reich has conducted her trade through a system of “blocked mark” payments. When Germany buys under this system she

pays in marks that are valid only for the purchase of goods in Germany ; the trade establishes a credit in Germany. But this credit is not one which the other country can transform through the foreign exchange market into money with which to buy goods wherever they can be bought most advantageously. Brazil had been trading with Germany on these terms, as have several countries in South-Eastern Europe, but the refusal of Brazil to honour the “blocked marks” brought trade to a conclusion, at least for the time being. Germany had been’ buying from that country more than she had sold, and the trade had put her increasingly in debt to Brazil. But Brazil could collect on the deals only by taking goods of German manufacture on German terms. An inevitable impasse arose which has been repeated in the area of Europe where Nazi efforts are now to be redoubled. Rumania, several months ago, welcomed British “efforts to gain ground economically” in that part of the Continent because Rumania felt that the alternative was to tie herself solely to Germany in trade that cannot be without political implications. The discussions in which the Little Entente figured at that time were not unconnected with the situation. Since then complications have arisen with the agreement on a non-aggres-sion pact between these countries and Hungary, whose Regent has been welcomed with abandon in Germany—Hungary is one of the dissident States—but Nazi commercial aspirations and the “blocked mark” system are certain to be closely scrutinised by other interested Powers.