The Hardin tribune-herald. [volume] (Hardin, Mont.) 1925-1973, 1934-07-20
SEENs"z HEARD
around the
National Capital

ANaaonal Napltal
- Hssy CARTER rIE1D@D
Washington.-Ambassador Luther,
those hurried trip nome after Ger
menys action on reparations 10 sur
prised diplomatic Washington, ID re-
turning, according to advices received
mere, with a real tale Of woe to back
.up MS negotiations for special treat
nent under the new tariff reciprocity
powers granted the President BY con-
eresa.
FOL IL the first year since the do
preston that Germany has had an adj
verse balance Of trade, for example.
e me Department Of Commerce, how
ever. skeptics point out that this ball
nee 10 not big enough against Ger
many TO onset the Invisible credit pay
ments for shipping. for other services,
INC Tor expenditures by tourists.
But 1t is no secret that the boycott
against German ships by American
INC other tourists-though Americans
are the most numerous spenders on
THIS sort Of thing-has hurt amazingly,
cutting into the profits Of the big fast
6erman ships which captured the
speed record Of the Atlantic 50 re-
Gently.
Meantime Germany's trade with Rus
pc has dropped to q low level. This
y partly the outcome Of the political
situation brought about BY Hitler, who
ioveriooks no opportunity to say I'M
Pheasant things about the Russians.
As a result, Russian trade Is being
transferred to Britain and to the Unit
90 States. Germany IL issuing no new
credits to Russia. The movement 10
the other way. Russia IL paying for
Foods received from Germany In pre-
yaous years. These funds should be
available for payment Of interest on
foreign debts, some Of our experts
think. but Of course there IL an un-
Known element. That 10 70 what ex.
tent Germany has been financing ex-
ports and stimulating sales abroad
through the repurchase Of German
bonds at deprecated prices
Makes Up Loss
Under that procedure the exporter,
who could not make . sale abroad II
the mark were at par. Il permitted to
quote q lower price, put the proceeds
Of the sale in foreign currency, and
buy the deprecated German bonds
abroad. The bonds are then brought
home and sold on the Berlin market
ct the higher quotations prevailing
then. That profit frequently makes up
for the loss on the sale OF The mer-
chardise.
&c Reichbank, however, does not
get the foreign currency paid for Ger.
mar goods, as 1t goes for the purchase
OF the German bonds. II the Reich
bank permits only 50 per cent Of the
proceeds Of the sale of German goods
to be employed in the purchase Of Ger
man bonds abroad, 1t receives the re-
manning 80 per cent in foreign cur
rency, but the system ID: one in which
the Relchbank always receives less
than 100 per cent Of the proceeds Of
German exports.
80 there Is NO way Of knowing to
what extent German export trade IL
actually making foreign exchange
available In payment for imports, or
for interest on German foreign debt.
The situation is one in which Germany
at any time might decide to devalue
the mark in an effort to create q bal.
ance. II devaluation were sufficient
only to achieve such q balance, there
would be no serious threat to the Brit
ish or the French position. A Germany
importing as much as she exports
would be assisting foreign industry by
her purchases al much az she might
put foreign industries under pressure
BY her competition.
But II the mark were drastically re-
duced to the point where the German
exporter would be given a clear advan-
tage In world markets, there might be
a period Of disturbance, which might
end with further depreciation Of Brit
ish pounds andfn the unsettling of the
gold currencieA. Which would lead d.
rectiy to tremendous pressure for fur
ther d~evaluation Of the gold value Of
the American dollar.
President Roosevelt still has q lee
way Of almost 10 cents which, under
existing law. he car use, marking the
dollar down to so cents gold, the Ag-
ure fixed ~ the limit by congress.
The chief question IL what such q
deraluation Of the mark would do to
Germany. Doctor Luther IL not report
ed to be happy.
Doubtful Practices
on masnates and their representa-.