AXIS PROBLEM

Otago Daily Times, Issue 24913, 12 May 1942, Page 3

AXIS PROBLEM

DROP IN PRODUCTION

INDUSTRY REORGANISED (N.Z.P.A. Special Correspondent) LONDON, May 10.

Germany, in preparing for a great offensive against Russia, has to face a complication which has been absent from all previous campaigns of this war. This time, when increased production is most needed, its volume has actually dropped, resulting in the necessity for complete reorganisation pf the internal structure. The Government has made many changes in an attempt to simplify and unify control of war industry, the latest of which is the appointment of an Armaments Council composed of high army officers, production officials, and industrialists, which is by-passing the civil administration wherever possible in an attempt to shorten the interval between the army demand and factory production. As the result of the ceaseless heavy fighting and losses on the Eastern Front, the High Command has drawn heavily on winter production, which in previous years has been safetly piled up for the spring offensive. Thousands of skilled workmen have been drawn from factories for strengthening the army. The reorganisation has relieved the burden, on the hard-worked central bodies, "in which the greatest dissatisfaction existed in recent months. They included many non-members of the Nazi Party. Herr Hitler realises how much he is dependent on party members, for which reason he has recently taken precautions to see that strong Nazis occupy all key positions in the political, administrative, justice, and economic spheres.

Element of Weakness

The Economist says: “ It is too *arly to say what will be the effect of this wholesale remodelling of the Germans’ administrative structure. Meanwhile it must have an element of weakness, which the Allied strategists should obviously take into account.” The Times says: “The German leaders no longer hide the difficulties of man-power, transport, and food supply, but the free peopled prudently remember that these difficulties largely exist because everything is being done to prepare the German fighting services for their greatest effort.” Meanwhile, how stands the Axis partner, Italy? There are many speculations consequent on recent events that Italy, seething with discontent, might break from Germany and replace Mussolini. Informed circles, however, are of opinion that Signor Mussolini’s Fascist edifice is crumbling and disintegrating to indifference, passivity, and lassitude instead of active revolt against its Nazi masters. Italy now faces a position in which the food situation is growing more alarming every month as the result of the blockade. the rapidly declining productivity of European agriculture, and Germany’s claims. The Economist states: “ Strict rationing has proved singularly ineffective, largely because of the indiscipline of the Italian people. The ‘ black market ’ is rampant in Italy, in which the rich are interested as consumers and the poor as producers, resulting in prices skyrocketing, with the growing danger of inflation. Italy’s economic position is one of bitter hardship, and is shared most inequitably between the rich and the poor.” Demands on Italy

An Italian collapse would be awkward at present for the Nazis, who regard Italy merely as a producer of cei'tain vital foodstuffs and raw materials. There is no doubt that Germany is demanding food and workers from Italy—reserves of which Italy is getting short, but Signor Mussolini cannot refuse. The Gestapao has not arrived in Italy to deal with political unrest, but to ensure that Italy delivers the goods in spite of social discontent and apathy. These Axis problems, while they should not be fastened upon too hopefully, indicate ,that the Allied nations are not the only ones having difficulties. There is no doubt that the Axis machine is working far less smoothly than at the outbreak of the war while every month sees the Allies polishing up their war effort to growing efficiency and striking power. BALKAN CREDIT BALANCES RETAINED IN GERMANY LONDON, May 10. The German News Agency stated that Dr Langfried, Reich Secretary of Economic Affairs, admitted in an interview with a Sofia newspaper that Germany is at present unable to fulfil her obligations under the existing barter and clearing agreement, therefore substantial credit balances due* to Balkan countries are being retained in Germany. The balances must be considered “ iron savings,” constituting the European countries’ contribution to Germany’s war effort. Dr Langfried promised that balances will be repaid by exports after the war.