Evening star., 1935-06-02
By ALBIN r. JOHNSON.


fencies as an infleXible yardstick for
measurement of valueS-creaklng and
groaning under the combined attacks
of the dollar. pound sterling and other
devaluated monies, the most vital spot
to watch today is Holland-and the
Dutch form, or guilder, as it is some
times called AS the f1orin goes. so
will go the gold bloc. is the saying
current on the continent.
To predict what the Dutch govern
ment is going to do about the f1orln
is to indulge in sheer gueSSwork. To
predict that the present situation can
not endure much longer is to attempt
TO estimate the Dutch governments
capacity for taking financial punish
ment. The form has been taking it
ever since the British pound deserted
gold. Germanys money regulations
hurt Holland terribly; the collapse of
the Belgian franc hurt still more.
Drying up of Dutch commerce, tying
up of her shipping tonnage. disap-
pearance of her East Indies markets,
disappearance of her tourist trade
all these factors have added to the
burden. Now, to make matters worse,
the internal political situation is COM
plicating matters.
Gold Coverage II Per Cent.
Financially Holland is solvent. On
May 10 her gold coverage was II per
cent and her note circulation had
dropped from 868,0000 900 to 846 ,000,-
600. Gold, which fled earlier in May,
was coming back to The vaults of the
National Bank. The gold reserve Ton
April u vas 1927 900 900. Hollands
banks are solid. Unless she does so
deliberately, Holland will not have to
desert the gold standard for an indefl-
mite period. All depends upon how
much money she is willing to lose for
the sake of an ideal" Her situation
is not at all analogous to that which
confronted the Belgians. They de-
valuated for much the same reason
that the United States did-a bank
structure which was about to crash
because of frozen assets and panicky
political condition. However. things
are going from bad to worse CONNER
Cially for Holland. With a naturally
adverse trade balance because she
imports foodstuffs, raw materials. etc.
heavily, the Dutch formerly relied
upon their shipping, colonial trade
and tourist traffic TO bring enough
gold into the country to cover the
deficit in exports Heretofore 80 per
cent of the tourists who have come
to Holland have been Germans. Now,
with a l0-mark limit on the amount
of money Germans can take out OF
the country, few. if any Germans
come into Holland. with its expen-
sive living costs. Thousands of anti
Nazi Germans have sought refuge in
Holland, it is true. but they become
burdens on the community rather
than assets. American, British and
other visitors are conspicuous by their
absence these days.
So far as commerce is concerned
the Dutch are slipping rapidly. Their
balance sheet looks something like
this estimated in normal gold dollars.
Exports-1929. s799. 100000; 1881,
1927. 300, 900; 1882, s340,900 900; 1884,
1886. 100000
Imports-192e, s1,1o6. 400 900; 1881,
$3.50, 900. 900; 1882, s523,7oo,Ooo; 1884,
417.300,000.
Hollands unfavorable balance of
trade (excluding currency and bull
lion) which was s306, 700 900 tgold) in
1929 had dropped to s131 200. 900
tgold) in 1884 which indicates how
much smaller the nations purchases
from abroad had become.
D~I;nz CoIo-:oz
As stated before Holland relies
largely upon her colonial empire to
provide wealth for paying for the
heavy imports of foodstuffs. etc. Her
exports of butter and cheese and
bulbs, as we'll as her diamond cutting
trade have also been sources of rev.
enue But her former customers are
tending towards becoming self-sup-
porting in dairy products, or else they
can buy them cheaper from countries
whose currencies have fallen, and the
diamond market has gone the way of
sll luxuries.
The Dutch East Indies, which for
generations poured untold wealth into
Holland now are actually liability.
The Dutch are spending more money
on them than they receive. Japanese
commerce has made great inroads,
and If Holland were to take retalia-
tory. or protective measures. such as
the British have done against the
japanese in India, Australia and
Africa, there would be serious dis
turbances. With his wages cut dras-
tically. and his market for raw mater
ials in slump, the Javanese and East
Indian insists upon an opportunity to
buy the cheap goods, textiles, ETC.,
which only the Japanese can furnish.
The figures for Dutch East Indies
commerce speak eloquently..
In 1929 the exports of the Islands
amounted to $58l, 100000 gold: in
1884 they had declined to S211 GOO, 900.
The imports of the Dutch East
Indies in 1929 amounted to $445, $780,
$l18,000,000. Dutch exporters were
chief sufferers.
Industrial production in Holland on
March /, 1885, was SO per cent of what
it was in 1928. Between 1929 and
1884 Dutch tonnage had decreased
from 1888, 100 to 2,618,000 and $50, 900
tons was laid up" year ago.
Shipbuilders Suffer.
How severely the Dutch shipbuilding
industry is suffering is shown by the
fact that in December, 1929, there
were 231, 300 tons under construction;
on last April l only 60,40o tons, under
construction, was in the ways of AM
sterdam and Rotterdam. Further
more, as a result of Belgian devalua-
ton Dutch shipping was going to
Antwerp where freight costs were
around 30 per cent lower than the
best the Dutch merchant marine
could quote. In competing with Brit
ish and American shipping the Dutch
like the French and Italians, have to
start with a handicap Of between 40
and so per cent.
But despite all her troubles and
tribulations Holland probably would
hang on to the gold standard indefl-
nitely were it not for the political sit
s,ofinv, Eod nm SrfferinO and llnem- m-