“NOT GERMAN OBLIGATIONS”

Otago Daily Times, Issue 23515, 1 June 1938, Page 8

“NOT GERMAN OBLIGATIONS”

The miracle as acclaimed by himself of Herr Hitler’s achievement in bringing his home country into the German Reich is not to be dimmed, it seems, by any vexatious association with the financial commitments of Austria to other Governments. Germany will refuse, on principle, it is reported, to recognise guaranteed Austrian loans as obligations on herself. Whether she pays anything or not is apparently to rest upon the decision of Hei’r Hitler. Thus another international issue is introduced. It will be recalled that an outcome of the dismemberment of the former “ ramshackle Empire ” was the post-war necessity for the financial reconstruction of both Austria and Hungary. They both appealed to the Council of the League of Nations for assistance in obtaining external loans, and the council came effectively to the rescue. Austria in 1922 was faced with financial ruin with all its attendant consequences. For the retrieval of her position plans were drawn up by the Committee of the League for financial and monetary reform, to be carried out within a definite period, and the monetary aid required was provided for by a long credit public loan of £26,000,000, which was successfully issued in various blocks pn European markets and in the United States, with the help of guarantees given by ten European countries. Trustees were appointed by. the League Council. The plan adopted by the League and carried into effect could be claimed, till very recently, at all events, to have achieved the object in view, namely the economic integrity and political independence of Austria. The loan security consisted in assigned revenues which were recommended to the investing public as adequate, as they proved to be. In a League publication issued a few years ago it is observed that the financial reconstruction of Austria and Hungary not only restored these two countries, but. formed a valuable precedent and example for the financial reconstruction of other countries, and “occupies a position of great importance both in the theory and practice of financial restoration.” Nothing has happened to falsify that judgment. But it is difficult to reckon with the ways of dictators. Now a sequel that was never anticipated may be added to„, the highly creditable chapter of the League’s activities in relation to Austria. Herr Hitler may even yet be found proclaiming that he has rescued Austria from her grasping creditors. Doubtless he will seek in some characteristic way to justify his attitude to the guarantor Powers. It might be supposed that he would at least have a genuine desire to spare Italy the blow of the repudiation of a debt to that country.