WOE IN BERLIN.

Waimate Daily Advertiser, Volume XXI, 13 January 1922, Page 1

WOE IN BERLIN.

(By Sir Philip Gibbs.)] I am writing this article from Berlin, where a few months ago I met many prominent people who gave their views on Germany’s chance of paying the indemnities to the Allies and regaining her prosperity. It may be remembered that those Views were fairly hopeful, 1 and I was personally impressed with the marvelous energy, industry and organisation of the German people and by the many signs of rapid recovery from the ruin of the war, despite the low wages paid the working folk and the* poverty of the small homes. If Germany succeeded in paying the indemnities by an enormous increase in export trade, it would l>e not only the greatest financial adventure ever at- : tempted, but, in so far as she succeeded in this, she would destroy the world trade of Great Britain and the United States. Since I wrote those words Gurniany , has paid her first big indemnity sum • and has steadily undersold British and j American goods in :hc Argentine .nil. the Scandinavian countries. The effect ■ of this has been observed by the con- ; trast between Berlin and London. Ger- < many, and England, to say nothing <>i the United States. Tn London, from which I have conic here, there are unemployed processions, minor riots and a dreary sense of depression because of failing trade and the gradual falling back to a low standard of life among all classes. Wealthy people are selling their estates and motor cars because of the high taxation, while capital is crippled, business enterprises are stagnant, and factories are closing down or working half time. In Berlin and other cities of Germany. eo far as I can find out, there is feverish activity and little unem- j ploymeni, and a brisk, increasing busi- ! ness. But the mark has dropped down to | half its value from the time I was here before. Something is rotten in Germany’s financial state, even though the ■ Germans are capturing the world markets. Loose-minded visitors, seizing super- | ficial impressions after a few days in Berlin, carry away a conviction that Germany is vastly prosperous in comparison with other European countries. Certainly many persons here arc making quick and big profits. There is a great wealth in paper money among speculators and commercial agents. Magnificent motor cars pass unceasingly down the Un ter den Linden. There is no lack of paper capital for commercial enterprises of every kind. Looking into the shop windows and watching the people in the big hotels, I am certain that there is a great deal of luxury and wealth in Berlin, due to successful financial activity.

But I .see fche other side of the pici are. I see a large number of men . still wearing old field gray uniforms ' which have been converted into civil clothes after three years of peace. And I hear from many friends that the cost of living here ie steadily mounting higher, while the value of the mark drops lower. Why has Germany’s mark dropped so iow in spite of the booming trade? The ‘ reason is simple. To pay indemnities, Germany has had' to buy foreign money, and, in so* doing, the exchange 'mmedlately rises against her. Another reason is that the increase in export trad l © at cut-throat prices is not • sufficient to balance the increase hi national expenditures. Worst of all, in order to balance accounts, Germany makes up the difference by sjieeding up the printing , presses for new issues of paper money. Every time that is done, the mark dro|k>, and the cost o-f living rises in , proportion, because the money will not hiiv ><v much. i Last week f mentioned the ne>\ • ag.rocinont between Germany and j France by which a part of the in ; dcmiihy will bo paid by Germany, not in money, hut in material for reI constructing northern France. I That seemed to 1 me, and it seems ■ still, a good arrangement. Certain- . Iv it is good for France, because she j will receive real wealth in solid things, | instead of money, which is only a symi bol of real things. This agreement I a .11 help make better relations between the two- countries and so promote peace in Europe to seme extent, 1 believe. But it will not tend, I find, to stabilise the value of the mark, for Germany ! will use her printing presses again to pay her own people for their labor and ! to pay manufacturers, with the inevit- ; able eon.sequence that a further depreI ( Jatitm in the mark will follow. This i will mean trouble with the workers, | who will find, as they are already find- | ing, that their wages are worth less iin purchasing power. They will demand more wages tu keep pace with . the rise in prices.