Germany has continued loyally and punctually to make the agreed gold mark payments to the Agent General for Reparation Payments, and transfers have gone forward regularly and currently under the auspices of the Transfer Committee, without interfering with the stability of the German exchange. The amounts involved have risen gradually, in accordance with the agreed schedule of payments, and the transfers to the Powers, while distributed among deliveries in kind, Reparation Recovery Act payments, and transfers in cash, have been made in increasing proportions in foreign currency payments. The Report also reviews the course of the German economy and describes in detail the changes that have taken place in the last six months. In general, the progress has been steadily upward, though not uniform in all industries or all sections and by no means free from difficulty. Heavy unemployment still continues notwithstanding substantial reductions in recent months, but all the evidence available points to increased production and consumption and to some improvement in the standard of living.
Savings also continue to grow.
But the great volume of imports from abroad, with no corresponding growth of exports, nevertheless suggests the question whether Germany may not recently have been over- developing internally, without making the progress in ability to compete effectively in the markets of the world which is so necessary to the development and expansion of her foreign trade. The large excess of imports over exports in the past six months has been one of the principal causes of the recent drain on the Reichsbank's resources and of the approach of the German exchange toward the gold export point. The whole period, moreover, has been under the influence of the Reichsbank's credit policy, which has had to be determined under conflicting influences and has not been directed primarily toward the protection of its foreign balances. The Reichsbank as the guardian of the German exchange has ample resources and authority and the stability of the German currency remains fully assured. But expenditures generally, including payments to the States and communes, have risen sharply until expenditures now exceed revenues, and for the first time since the Experts' Plan came into operation borrowing has been necessary to balance the budget of the Reich.