GERMANY’S ECONOMY

Te Awamutu Courier, Volume 59, Issue 4185, 13 September 1939, Page 5

GERMANY’S ECONOMY

HER METAL RESOURCES. DIFFICULTIES OF BALTIC TRADE. This article is an extract from Dr Ivan Lajors’ book, “Germany’s War Chances.” The book was published less than one month ago. Before Germany and Russia reached their present understanding the Third Reich was very badly off for oil. She produced none herself, and could secure only limited quantities from Rumania. Although she has perhaps resolved the chief of her fuel difficulties, Germany’s supplies of other raw materials are dangerously inadequate. Any war now will be a war of supply. The Powers which have the greatest resources and greatest staying powers will be the victors. A short sharp encounter is out of the question.

Germany lost some of her coal mines after the war, but by a great effort she now has more coal reserves than she did before 1914.

She now produces the equivalent of 237 million tons of hard coal a year. Austria, however, is a burden, as her low production rate will make her dependent on Germany in times of stress.

During the Great War Germany’s wealth in coal and her capture of the French and Belgian coal mines made it possible for her to exchange coal for foodstuffs from abroad. But even if her production of coal has increased since then, so has the quantity she consumes. Also, the Maginot Line makes it impossible that she will ever gain possession of the great coal reserves of France and Belgium this time. Coal consumption in war time is always enormously greater than during peace. Inevitably, too, production drops, and domestic requirements rise sharply. Experience during the Great War shows that Germany can be painfully short of the very commodity coal that she possessed in plenty during peace time. The territorial disposition’s in the Treaty of Versailles struck a heavy blow at the German war potentialities in iron ore.

Her present iron resources are much worse than in 1914. At the beginning of the last war Germany did not have enough iron. But within a few weeks she had captured about two-thirds of the whole French iron and steel production and the whole Belgian production as well. After the Great War the Reich lost her richest iron ore districts. The acquisition of Austria improves the position for Germany, but even with the Austrian mines the Reich’s position is far inferior to the of pre-war years.

In Berlin they are ripping up old tramlines for the scrap iron. Park railings have been torn down, and any ironwork around private houses has been surrendered. Sweden is the most important source of current supply. Most of the Swedish ore comes from the port of .Narvik, which could be instantly blockaded by the British fleet. The Baltic is the obvious means of transport, but even this is not free from difficulty and danger. A special railway line for no other purpose would be necessary, and the danger from air raids is great.

Even in peace time the German blast furnaces are working at a pressure that makes collapse a possibility if great pressure is applied. Germany no longer produces the superior Martin steel, but Thomas steel only, even though its phosphorus content reduces its toughness. Its only advantage is that German ore can be used in its manufacture. German navy officers “coinplain bitterly about the use of aluminium as a substitute for copper and nickel and fine steel work in the German shipyards. It does not stand up to heavy sea work, and cracks with the broadsides of the big guns.

News reports have several times appeared suggesting that some of the newest German submarines have become useless after the first trials, and have actually to be reconstructed. These reports were received with the greatest scepticism until the behaviour of German submarines made for the Turkish navy was noticed. Six new vessels delivered to Turkey by the Krupp works had to be withdrawn from the fleet after k few weeks.

Money is one of the most important questions for any nation contemplating war—and perhaps most important of all for present-day Germany. If you compare Germany’s financial position to-day with that of 1914 you will find that it is grave indeed. The opposing countries’ gold assets and foreign exchange and credit must play an imposing part in any modern war. In the five years before 1914 German trade balance, was 7,000,000,000 gold marks (£350,000,000), with her assets in foreign stocks and bonds at least 35,000,000,000 , marks (£1,750,000,000). And, though the Allied Powers’ financial position was even better, Germany’s money enabled her to import £200,000,000 worth of foodstuffs above her exports right up to the last year of the war. Her internal financial position was sound as could be. Her internal debts were small ,and Imperial pre-war Germany neyet ex-

perienced inflation. Therefore financing by war loans was comparatively easy, because the German people had not the faintest idea what the ultimate fate of their loans would be. But a quarter of a century has passed since then. To-day the German masses are acquainted with the terrible effects of inflation. They have uneasy fears, because for six years Germany’s budget has not been made public;