The Wanganui Chronicle TUESDAY, DECEMBER 6, 1938. TRADE IN SOUTH-EASTERN EUROPE

Wanganui Chronicle, Volume 82, Issue 288, 6 December 1938, Page 6

The Wanganui Chronicle TUESDAY, DECEMBER 6, 1938. TRADE IN SOUTH-EASTERN EUROPE

C' EKMAN efforts to expand her export trade in South-eastern Europe has called forth similar efforts from the United Kingdom. The methods pursued by the two countries, however, differ considerably. Finding herself at a disadvantage in Western Europe, and witnessing a rising antipathy in the United States and in the South American Continent, Germany has determined to exploit the markets of South-eastern Europe. Such a move was expected because it was the natural outlet for German trade, and followed traditional pre-war policy. In 1914 Germany witnessed the first signs of recession, and was also disturbed by the desire to control sources of raw materials. It was this which led to the Moroccan crisis and was, in part, a prompter of Germany’s conduct in starting the war, because she wanted the French colonial possessions. Viscount Grey, in his memoirs, admits that in order to gain German abstention from interfering in the affairs of Egypt, where I< rance, after the Fashoda Incident, adopted the role of the trouble maker, Britain agreed to leave Germany free in the old game of concession-hunting in Turkey. With that agreement as a starting point, German interests conceived the Berlin-to-Bagdad railway scheme with a view to exploiting the markets of the Near East and Central Asia. The Great War, however, put back the scheme for more than two decades. It is taking shape once again. . ... Dr Funck, German Minister of Economic Administration and Trade, has declared recently that South-eastern Europe and Asia Minor can supply all of* the raw materials that modern Germany requires. Prior to the depression Germany was an importer of grain from the Danubian countries, and Germany has remained the major export market. The South-eastern countries of Europe found that Germany was heavily indebted to them when the free flow of credits was stopped by the Reich. The creditor countries had to be content with blocked marks as payment for the already-delivered grain. These blocked marks were subjected to several discounting operations, but were usable under the trade agreements which were negotiated by the respective Governments of the countries concerned. These trading agreements proved to be advantageous to Germany because she was enabled to cut down at will either the value of the blocked marks or of the number which were available at any one time, and to charge high prices for the goods sold. The foreign purchasers qf German goods found that they could secure better quality goods at lower prices from British, French and American sources. There were also complaints as to quality, an expected result when buyers are compelled to resort to one market. The new trade agreements which Germany has succeeded in negotiating are. in essence, barter agreements, but they follow along lines adopted in the trade agreement concluded between Germany and New Zealand. The purchase of German goods is first made, but now the buyers of South-eastern Europe are given long-period credits. The purchase of machinery will, for instance, enable the buying country to increase its production of grain, and the credit period will defer payment until the increased harvests arc available. The grain will then be shipped to Germany at an agreed-upon value and debited against the credits previously granted. Great Britain’s method has been to buy grain in the countries concerned and then to give credits in London on which greater freedom of action is permitted. Prior to the Great War it was an axiom with international bankers that it was undesirable to attach conditions to a foreign loan: the reason for this was that the loan was safer the more economically it was spent. It is to be noticed that it is the intrusion of the political factor which has restricted the freedom of the borrower. It is to be seen that the so-called “money-power” was less anxious to exercise its power than are Governments. In the trade conflict which is being waged in South-eastern Europe, however, the German exporter is being supported by the whole of the resources of his Government. From the individual exporter’s standpoint these are limitless, and it is feared that the extended terms which German merchants may thus be able to offer will be more favourable than those which British exporters with their present resources may be able to offer. It is probable that some new development may be witnessed in the handling of Britain’s export trades.