The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-12-26
BY WEBB MILLER
United Press stan Correspondent


United Press stan Correspondent
Copyright. 1881. By United Press
BERLIN, Dec. 26.-Money poured
Into Germany by the United States
and other creditors, which the
Reich now is unable to pay, has
been sunk largely on projects from
which no return will help pay off
the debt.
Misjudgment, over Optimism, and
eXtravagances of pork barrel poll
tics" by the borrowers, and miscal-
culatiOn, insufficient investigation,
and OVer-eagerness to lend at high
interest rates by the lenders, are
some OF the factors in the lending
and spending Of part Of the S2,500,-
100000 which Germans borrowed
from 100000 American investors.
That is the opinion of men who
have watched the development Of
Germany in recent years.
Economy Is Ordered
Although the government has
made a general denial Of extrava-
gance, it admitted that more than
250,000,000 marks Of borrowed
money in the past six years went
for luxuries such as sports grounds,
parks, art and sciences.
Another admission Of eXtrava-
Rance was contained in an order
from the ministry of labor for fu-
ture restrictions in the size and
equipment Of workers flats.
In recent years too large and
too expensive apartments have been
built" the order said. In the fu-
turc the government will aid in
financing construction only if the
building was constructed so eco
nomically that rents can be paid
under existing social conditions.
In newer buildings space is linn
tied from thirty-two to forty-five
square meters for the average fam
lily. Central heating is omitted in
some of them.
Records show that for the six
years ended with December, 1880,
building permits issued alone in
cities over $4,000 population totaled
100000. This spring, $4,000 apart
ments we're under construction IN
Berlin
Apartments $40 Monthly
The German fortunate enough to
be able to live in the new buildings
is the best housed worker in the
world. visited the Britzo settle
ment on the outskirts of Berlin, a
vast series of modernistic and arts
tically finished buildings, in maroon,
mauve and cream stucco placed IN
O. garden setting.
The settlement is as large as a
town. 1t contains LOO flats in
series of apartment buildings and
900 dwellings in Semi-detached
houses. The average rent for one
and half rooms and kitchen is
fifty marks $50 monthly; for two
and half rooms and kitchen,
seventy marks. All such quarters
have bath rooms.
The governments part in the con-
struction of the settlements is in
dicated by the fact that of 2,680A-
100000 marks spent for residential
construction in Germany in 1880,
1156,0OO,00O marks were advanced
from public funds derived from spe-
cial taxes.
There are several explanations of
the building craze, in addition to
the fact that there was no construc-
ton in Germany during the World
war. After the war the Socialists
came into power and began to APP
ply the creed of improvement of
conditions for workers and spon-
soring the building of homes such
as those of which Socialist workers
dreamed.
Depression Hit Germany
Furthermore the initiation period
taught the people that mo.-ey may
suddenly evaporate, but that brick
and mortar and machinery and fac
tories will endure despite the
vicissitudes Of currency.
The result was that many build
ings were constructed SO expensive
lv and we'll fitted that at a rental
based on normal conditions they
would be beyond the means of the
average worker.
Despite misiudgment and ex-
travagance in spending, American
observers here believe that Germany
undoubtedly would have been able
to meet her obligations without
much difficulty had not the world
economic crisis interviewed.
L. s. In Vicious Circle
They saw that over borrowing
was largely the fault of the lend
ers. especially American and British
banks which poured money into
Germany because they were get
ting 8 per cent interest or more,
often without a normal investiga-
ton of the borrowers prospects and
assets. Due to the intense COMPETE
ton among the lending banks, bor-
rowers often took more than they
needed because 1t was so easy to
get.
With the vision of expanding
world trade, industrialists enlarged
and modernized their factories and
increased their capacity enormously
in order to compete with the very
countries which lent them the
money.
Nearly so per cent of Germany's
industrial capacity is idle at pres
ent, but if world trade revives be-
fore their industrial equipment is
outdated, Germany will be the best
equipped nation in Europe to COM
pete in world markets.
The principal creditors, the
United StaS-s and Britain, are in
the anomalous position OF having
to permit Germany to invade their
markets and sell heavily to enable
her to repay the money used to
build the machine with which
creditors are competing.