The New York herald., 1921-10-23
Strike of Walters in Capital
Seen as First Sign Of
the Collapse.
HER FINANCES UNsOUND
Affluence and Poverty Appear
in Striking Contrast in
Berlin's Streets.
BY SIR PHILIP GIBBS.

BY SIR PHILIP GIBBS.
Special Gable to THE New YORK HERALD.
Copyright. 1921, by THE NEW YORK HERALD.
BERLIN, Oct. 22.--I am writing this
article from Berlin, where a few
months ago I met many prominent
persons who gave their views on
Germany's chances of paying the in
IDENTITIES to the Allies and regaining
her prosperity. 1t may be remem-
bered that those views were fairly
hopeful, and was personally ina
pressed with the marvellous energy,
industry and organization Of the Ger
man 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 in the
small homes.
II Germany succeeded in paying
the indemnities by an enormous in
crease in export trade it would be not
only the greatest financial adventure
ever attempted, but In so far as she
succeeded in this she would destroy
the world trade Of Great Britain and
the United States.
Since / wrote those words Germany
has paid her first big indemnity sum
and has steadily undersold British and
American goods in the Argentine
and the Scandinavian countries. The
effect of this has been observed by the
contrast between Berlin and London,
Germany and England, to say moth
ing of the United States.
Contrast with London.
In London, from where / came to
this city, there arc unemployed pro-
cessions, minor riots and a dreary
sense of depression because of failing
trade and the gradual falling back to
lower 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 Ger
many, so far as can find out, there
is feverish activity and little unem-
ployment and a brisk, increasing
business.
But the mark has dropped down to
half it's value from the time / was
here before. Something is rotten
in Germany's financial state, even
though the Germans are capturing
the world markets.
Loose minded visitors, seizing su-
perficial Impressions after few days
in Berlin, carry away conviction
that Germany is vastly prosperous In
comparison with other European
countries. Certainly many persons
here are making quick and big profits.
There is great wealth in paper money
among spectators and commercial
agents. Magnificent motor cars pass
increasingly down the Inter den
Linden. There is no lack of paper
capital for commercial enterprises of
every kind.
Much Luxury and Wealth.
Looking into the shop windows
and watching the people in the big
hotels l am certain that there is a
great deal of luxury and wealth In
Berlin, due to the successful financial
activity.
But / see the other side of the
picture. / see large number of
men still wearing old field gray uni
forms which have been converted
into civil clothes after three years of
peace. I see workingmen who wear
no shirts beneath their tunics. And
! hear from many friends that the
cost of living here is steadily mount
ing, while the value of the mark
drops.
Why has Germany's mark dropped
So low In spite of the booming trade?
One reason is simple. To pay indem-
mites Germany has had to buy for
eign money, and in so doing the ex-
change Immediately rises against her.
Another reason is that the increase
In export trade at cutthroat prices
is not sufficient to balance the in.
crease in national expenditures.
Worst Of all. in order to balance
accounts Germany makes up the diff
ference of speeding up the printing
presses for new issues of paper
money. Every time that is done the
mark drops and the cost of living
rises in proportion, because the
money will not buy so much.
Indorses Plan to Pay French.
Last week I mentioned the new
agreement between Germany and
France by which a part of the in
demnity will be paid by Germany not
in money, but in material for recon