PROBLEM FOR NAZIS

Otago Daily Times, Issue 23593, 1 September 1938, Page 11

PROBLEM FOR NAZIS

FINANCIAL SITUATION

DIFFICULT CHOICE FACED

LONDON, Aug. 24.

Germany is on the horns, of a dilemma in her present financial crisis, which has been revealed by the startling slump on the Berlin Bourse. v • ' A writer in the Financial News says he believes that, in the absence of any adequate demand for genuine investment, the only way in which the fall can be checked is by Government purchases, directly or through, the banks. ' * ~•■' The writer states that the banks* resources are immobilised as a result of the inflationary change in Germany's monetary policy m April. 1938. To enable them to bolster up the prices of securities by heavy purchases, a reversal of that policy would be necessary. Continuing, the writer says:— " Presumably, this is what the German Minister of Economics (Dr. Funk) had in mind, when he alluded to the possibility of a change in methods if necessary. Evidently Germany is confronted with a dilemma. She has to choose between a resumption of her expansionist monetary policy—which because of the full employment, of her population would lead to inflation—and a restrictionist policy—which would bring about a fall on the Bourse and a setback to trade. i "The choice is not easy, but if in the contest between Dr Schacht and Dr Funk the latter was likely to win, the possibilities of non-stop inflation would be greatly increased."