Perth Amboy evening news., 1923-02-17
EUROPE'S GREAT ECONOMIC
RACE is TOLL OF
Daily Letter by Frederic j. HaskiD

WASHINGTON, Feb. 17:-The
whole world today is spectator of
the most fascinating and important
economic ace which probably ever
| has been run. 1t is a race between
two conflicting economic forces in
Europe and Time is the deciding
factor. The race is between the de-
structive economic forces which are
loose in Germany and the construc-
tive forces operating in othel Euro
pean countries. The issue is whether
all Europe shall GOV in the not
distant future or sink into dangerous
chaos which might conceivably in
volve the United States.
The German economic situation
daily is growing worse and worse.
The German mark continues to de-
/ cline. Bankruptcies are increasing
and production is disorganized. The
| whole nation is in a whirlpool o. be-
wilderment. No improvement is in
! sight while the PREPARATIONS question
remains unsettled. Germany began
going down-hill at the Armistice and
has continued eve since, the speed
Of her downfall accelerating every
dav.
The countries surrounding Europe
have slowly but steadily been I'M
proving their economic position since
the Armistice. They remain weak
compared 10 what they were before
the war, because Of their huge debts
and their disorganiZed exchange.
Drastic steps have been taken, how
ever, to balance budgets and to pro-
duce goods to sell in the foreign
trade. There have been serious
strains and a reduced standard of
living for the bulk of the populations
but all things considered, these coun-
tries have been getting better and
better each day while Germany has
been declining
France has made progress in re-
facilitating the devastated regions
and rebuilding her trade and indus
try. Italy has gone through a series
of shocks but is emerging stronger
! every day. Czecho-Slovakia, of
the new countries carved out OF Aus
tria by the Versailles treaty, mas
| made phenomenal progress toward
rehabilitation of her affairs. She has
even gained a favorable trade bal
! ance and her currency has for some
time steadily been approaching in
value. The productivity of these ma
tons surrounding Germany has been
steadily augmented. Even Soviet
/ Russia is regarded as being in strong
er shape than at the time of the
Arnlistice. While her foreign trade
amounts TO little and her people
have been ravaged by famine, she
has recommended production and, at
least, is getting NJ worse.
The race, then, is to determine
whether the countries surrounding
Germany can build themselves up in
to a position of strength H. enough
10 withstand the severest shock be-
fore the German decline comes to an
| abrupt end in a decisive crash.
Crash May Affect All Europe
1t is recognized that If the crash
! should come in Germany within the
next six months it, would affect all
Europe seriously, very likely tearing
down all that has been uilt up since
the end of the war. 1t IS believed
that it even would drag England
down. Business is so closely inter-
woven across international bounda-
ries that a wholesale failure in one
state will affect the surrounding ma
tions adversely. If these nations are
none too strong, such a collapse will
plunge them all into bankruptcy.
Now if the crash in Germany car
be STAYED off for perhaps a year OF
more, the surrounding nations will
have opportunity to prosecute then
trade and their production of valua-
BILE goods and rehabilitate their bust
ness to a point where they will have
strength to Withstand a shock from
a ueighbor state. If they can have
time to gain strength, German bust
ness can go into wholesale bank
ruptcy without dragging down the
rest of Europe. To be sure. ever
with all Europe outside of Germany
In prosperous condition, a German
collapse would cause distress. Sert'
Gus business fractures would result
and there would be heavy losses, bu'
the disaster would not be national II
the case of each surrounding coun'
try. There would be enough soliditS
to ~localize the German collapse
Banks and great industrial organiza'
tons, with the aid of the govern.
ments, could fortify their nationa
businesses against the effects of Ger
man bankruptcy and the bulk o
Europe would be spared a genera
disaster.