The Washington herald., 1922-09-04
|DEFLATION EONLY
CUREFOR GERMANY,
ASSERTS SIR PHILIP
Admits Remedy Would
Cause Suffering in Ma
tion, However.
By SIR PHILIP GIBBS.

lin, where l write this article, ev-
cry German is panic stricken by
the precipitous fall of the mark
and asks what will happen to his
country this winter. That ques-
tion is answered not only by Ger
mans. but by British and American
business men with one sinister
word--revolution.
BY that they mean bread riots.
social disorder and tidal wave of
anarchy impelled by the hungry
masses. They see no way of es-
cape from economic collapse and
social upheaval, whatever happens.
for Germany, by its own fault or
not, has fallen into such a rotten
financial condition that her diseases
can only be cured by remedy
which would cause an immense
amount of suffering.
Must Restrict Paper Money.
That remedy-the only one-is to
restrict the issue of paper money.
For the last three years the Ger
man government has met all her
financial troubles by speeding up
the printing presses to make notes.
Her issue OF these notes has
reached figures beyond the imagi-
nation of ordinary mortals. They
are astronomical figures reckoned
in mi'lards.
For some time this imitation of
paper money created the Illusion
or prosperity and enabled German
manufacturers to compete at cut
throat prices in world markets.
Cheap money prevented unemploy-
ment and gave a feverish stimulus
to industry. But every time new
issues of notes flooded Germany
the value and purchasing power
declined inside and outside the
country.
Caught in Vicious Circle.
Prices rose and to catch up with
them wages had to be increased.
Then began the whirling of a VI
cious circle. New notes were is
sued to pay increased wages and
the cost of government. Again pa
per money decreased in value.
more was needed to buy the same
amount of goods or service.
Again note issues multiplied It
became mad dance. a financial
jazz, round and round like a dog
chasing its tail. Then the reality
of economic laws challenged san
ity. Germany has had to buy IS
per cent OF its grain supplies from
abroad. She has had to buy from
foreign countries raw material for
clothing her people. She is buying
100000 tons of coal weekly from
England. She is buying meat from
A merica. She cannot pay for these
things in false paper money. For
eign exchange rates reduce her
marks to their true value. now
standing as / write, at about I.400
to the dollar. nearly 5000 to- the
English pound. That means dis
aster of great magnitude.
Spend Money ProdigaIIy.
So far this may not be seen at
Berlin. There are few signs Of pow
erty apparent, there Is pleasure
even in the restaurants. cafes, the
aters and public places. The masses
and middle class folk have this
paper money to spend and spend II
with prodigal hands. 1t would be
foolish to be thrifty, for what is the
use of saving marks when from
one day to another. even from one
hour to another, their value drops
like stones humping down hill 1t
is better to spend quickly, to buy
fast. before prices rise.
1 reached Cologne one night when
marks had fallen heavily in ex-
change rates. The railway station
was crowded with humble folk who
had come back from country markets
laden with foodstuffs which they
had bought before prices , rose.
women, girls, and young boys stag
gered down the platforms under
heavy burdens of potatoes, meat,
cheese, pots, pans, wood and stuff
for frocks.
wild Rush for stores.
In Berlin there was a wild rush
to the big stores before prices were
marked up again. They were
marked up quickly. Foreigners
who swarm Berlin are international
vultures who prey on the diseased
body of the European nations: rich
tourists from America find Berlin a
happy hunting ground. Increased
prices which hit Germans hard
mean nothing to them for even IL
doubled and trebled they are still
ridiculous in foreign exchange.
The other night I gave q dinner
party at good hotel to five friends.
We had soup. fish, meat. ices, cof-
fee and two bottles of Rhine wine.
The little affair cost 81. with a
handsome tip to the waiter. Taxi
drivers multiply the figures on their
clock fifty times in q few days. 1t
will be eighty times. but even then
one can drive a mile for so cents.
Railway Travel Cheap.
Railway travelling costs next to
nothing for, foreigners whose. money
Is good I went yesterday to
Wannsee, q beautiful lake eight
miles from Berlin. 1t cost me. Sec
ond class, 4 cents. American la
dies in Berlin are buying fur coats,
art treasures. trinkets of all kinds
at half and a third the price in
New York, although they are
charged three times as much as
Germans.
But what about these prices for
the Germans themselves? They are
enormous, in spite of the rapid
printing of paper money. A small
roll of bread, 10 marks. A cheap
suit of clothes 5000 or 10000 marks.
The working man gets now an av-
erage wage of 1900 to 1000 marks
weekly How Is he eoinp IN buv