Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-10
ECONOMIC STRAITS
. DEPRESS GERMANY
People Steadily Losing Hope
as Unemployment in Ma
ton Increases.
BY OTTO BRoK.


ny Radio to The Star.
BERLIN, Germany, October 10.-with
unemployment steadily increasing, q
feeling Of hopelessness bordering on
despair pervades the German people.
Demands for revision Of the Young
plan are multiplying under the pressure
of the present crisis and the trade
unions, which heretofore have been reti-
cent about the issue, follow industrial
md agricultural organizations with reso-
buttons asking for moratorium.
Since the elections business has de-
clined more rapidly and there is little
doubt that economic conditions in Ger
many are not only a result Of the gen.
eral world crisis, but also Of political
troubles which strongly enforce the UNI
favorable factors Of the economic situa-
ton.
Affecting Stock Exchange.
Never before have political osciIla-
tions been so clearly reflected by the
money market and the stock exchange
as during the last few weeks. The trend
Of the exchanges has been nearly ex-
clusively determined by questions such
as: VIII the government succeed In
covering the budget deficit? Will it
find o majority for this or that bill?
Will the Nazis Irrational Socialists or
Fascists) be taken into a government
coalition?
The fear of putsches has been one of
the chief causes in creating such o
surprising dependence of business on
politics. but the fact that Germanys
economic system has q semi-Socialistic
character and is, therefore, closely link
ed with state politics must also be rated
as an important factor In the present
economic distress. Both German and
foreign investors have carefully followed
political developments and have bought
and sold on political grounds.
Publication of Chancellor Heinrich
Bruening's finance program improved
the tendency on the money market and
the stock exchange for few days, but
then the markets were again spoiled BY
the fact that a majority for the new
program In the next Reichstag Is not
yet assured. The flight of capital and
demand for foreign exchange has,
therefore, revived, and the Reichbank
alone lost $3.50, 000, 900 In gold and for
eign currency within the last three
weeks.
Uncomfortable Factor.
A most uncomfortable factor In the
monetary situation Is the large amount
countries. The total Of foreign debts
Of German banks now amounts to Q
maximum Of $4,000 0O0, 900. The re-
serves Of the German banks In foreign
countries, on the other hand, have
fallen well below $1,000, 00o, 600, 90 that
the balance Of the short-term indebted
ness figures Is at least $1,000, 900 900
against Germany.
Since the elections French, Dutch and
GVTrfnm faAa Aan.
streaming back and In most cases where
foreign credits have been rendered,
there has been decided tendency 10
demand the shortest possible terms.
The position Of the Reichsbarik Is still
very strong, but It seems o problem
whether It can prevent rising Of the dis.
count rate this present Winter unless
conditions show Q decided Improvement
Virtually all branches Of trade and
industry have also been showing dig
courag1ng declines during the last few
weeks. There is q particularly bad sit
uation in building. where unemploy-
ment now stands at about 20 per cent,
compared to 10 per cent last year.
Despite considerable decrease IN the
coal and iron output at pit heads, stocks
Of coal and coke are growing to enor-
nous dimensions. In part this recess IN
sales Is due to expectations Of state In
PREVENTION.
Expect Radical Price Cuts.
The price reduction propaganda Of
the government, together with the
cartel ordinance OF the President au-
thorizing the government to smash car
tells II they keep prices unduly high,
has led many people to believe that
radical price cuts are bound to come
soon. They therefore keep their stocks
as low as possible In order to profit from
the coming price reductions.
So far, however, the prices to con-
sumers have not shown q noticeable
decline excepting luxuries and textiles.
The conviction that more radical price
cuts must be effected Is growing In
Germany, and even such circles as here
tofore were unamenable to price re-
duction arguments now admit their
necessity.
So far Germany has financed It's ex-
ports with high prices within the coun-
try. This means that the German COM
sumner has had to contribute to the
financing Of exports. But there q O
limit to such methods. At o certain
point the price level win be too high
and the purchasing power Of the Ger
man people too small In order further
to increase exports which, though, are
badly needed to fulfiI the countryis IN.
ternationaI obligations
(Copyright, 1881