Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, WEDNESDAY, OCCT. 12, 1937 GERMANY'S PROBLEMS

Poverty Bay Herald, Volume LXIV, Issue 19454, 13 October 1937, Page 4

Poverty Bay Herald PUBLISHED EVERY EVENING GISBORNE, WEDNESDAY, OCCT. 12, 1937 GERMANY'S PROBLEMS

With all the talk of German rearmament, the antagonism of the Reich to other European Powers, the Nazi demand for a return of former colonies, the persecution of the Jews, and other similar issues, people in other parts of the world are apt to forget that Germany has at least her share of the domestic problems which confront other nations. It Is probable, in fact, that she has more than her fair share, and that the questions to which so much prominence is given are designed to distract attention from the issues that really count in the everyday life of the people of any country. Rearmament, except indirectly and temporarily, hostility to foreigners and others, and claims for colonies do nothing to provide for the material comfort of the people; at the best they create a form of mental or spiritual stimulus which causes sacrifices and hardships to be minimised and tolerated; they are accepted as an excuse for conditions which could not otherwise be justified. In other words, Germany in recent years has been sustained largely by a form of mass hysteria, but hysterics always have a tendency to go from one extreme to the other, and signs are not lacking that a reaction may be setting in in Germany. The coming winter may, indeed, provide a crisis, for there is increasing evidence of the difficulty of obtaining the necessary supplies of essential materials and food, and, even more important, of convincing the people that these sacrifices would not be avoidable under a better ordered regime. A few years ago it was comparatively easy for Dr. Goebbels to claim that guns were more essential to modern Germany than butter; but to-day, even the trade agreement with New Zealand testifies to a realisation that human beings, in the very nature of things, are more concerned with their bread and butter than with a pomp and display which are satisfying to nothing but vanity—and it is not easy for even the most disciplined people to retain their vanity on empty stomachs. In an endeavour to bridge the gap between the Government's desire for arms and the people's need of food, Germany embarked upon a plan which was to give her economic selfsufficiently. So far, she has met with comparatively little success, for she is still compelled to import 25 per cent of her foodstuffs, other than root props, and 80 per cent of her textiles. To obtain these things she must find export markets for her manufactured goods, and this has not proved an easy matter in a world where competition is keen and every national boundary is hedged round with tariff barriers. According to her fouryear plan, Germany should be increasing her exports and reducing her imports, but the actual results

have been the reverse and the favourable balance which is necessary in order that she should meet her overseas commitments has been dwindling instead of expanding, the result being that she has less credit than ever with which to secure those things which are so greatly needed by her people. The difficulties have been aggravated by the rising world prices, particularly of materials required for the manufacture of munitions, the consequence being that she has been compelled to accept reduced supplies. It is this position that has resulted in a further curtailment of the family menu, already seriously restricted, in an effort to conserve the supplies which will be available during the winter. It is that state of affairs, also, which made Germany so anxious to conclude a trade agreement with New Zealand, enabling her to obtain some supplies of foodstuffs in return for the output of her factories. It is significant that even now the rate of exchange to apply in this bulk barter agreement has not been divulged, but in the light of German conditions it is inevitable that workers will be employed for long hours at the equivalent of six or seven shillings a day in order to produce the goods which are to be traded for New Zealand butter. Closely allied to the economic plight of Germany are her financial difficulties. She embarked upon her vast rearmament plan and costly public works at a time when her credit was reduced almost to nothing, when taxation was at a crippling level, and when her trade was contracting instead of expanding. For these things the people have to pay, and the only way in which they can pay is by further tightening their belts and working longer hours for less and less pay. Last month Germany raised her third internal loan this year, the aggregate, at the nominal exchange rate, being equal to £ 175,000,000, but this process cannot go on indefinitely. In the light of her previous experience Germany is not likely to conduct any more experiments in "costless credit" or using the public credit, as is sometimes advocated in this country, and this means that the only course open to her is a drastic recasting of her whole economic structure and farreaching reductions in her public expenditure. She is now caught between two fires, one, rising world prices, and the other, her own financial embarrassment. In these circumstances, it will not be surprising to find that the people are becoming more and more discontented and that Germany is heading for a crisis of one sort or another. This winter may bring things to a head, and it is not impossible that the rest of the world may be called upon to unite either in a campaign to suppress German militarism or else in a determined endeavour to relieve her economic distress and thus eliminate the alternative of war.