GERMAN THREAT ABANDONED

New Zealand Herald, Volume LXXI, Issue 21845, 6 July 1934, Page 10

GERMAN THREAT ABANDONED

The Chancellor of the Exchequer has described the debts agreement with Germany as a satisfactory solution. It is, in view of all the circumstances. British creditors have now a promise that they will be paid. The moratorium declared by Germany will not operate, and the British reprisals to it, ready under the Debts Clearing Offices and Imports Restrictions Act, will therefore not be needed. So ends a very inglorious attempt to defraud tho British creditors, an attempt particularly reprehensible because the loans were advanced in response to a plea that Germany was in sore need of them. If the agreement is honourably kept during the covenanted period of six months—the period, by the way, of the announced German suspension of cash transfers —commercial relations .between the two countries should have a chance of becoming normal. One phase of the question, however, remains of practical interest. The moratorium has been withdrawn, its threat being answered by the speedy British legislation arranging reprisals, but while the negotiations were proceeding a similar law was adopted by the German Cabinet, which now is doing the business of the country without responsibility to the Reichstag. This law. like that of Britain, is general in possible application, as it authorises summary economic action against any country, but it was equally intended to especially to the other party in this quarrel. It was a counter-move to the British legislation. Why was it enacted during the London negotiations, conducted for Germany by delegates fully empowered to act peaceably for the Government authorising this bellicose reply? The answer is found in tho habitual German policy of assuring the people that Germany will brook no threat from abroad. Dr. Schacht, president of the Reichsbank and the originator of the decision to default, was not one of the delegates. While the friendly negotiations were proceeding abroad ho presumably took steps to maintain at home an appearance of patriotic inclemency and resistance to the foreigner. Ho has been called "a modern Macchiavelli," with an aptitude for action on four fronts—to Germany's creditors abroad as their only hope of getting payment, to Hitler as still his most capable and trustworthy economic adviser, to the German capitalists as the only man able to direct Nazi policies into channels safe for private enterprise, and to the German people as their hero in all affairs of business. The Cabinet's law was plainly his device, a piece of bombast for merely stage purposes. On both sides the legislation stands, a twin memorial to an unfortunate bit of German finesse—with the difference that the British law will prove again wholesomely effective if "need be,