The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1936-09-11
Loans Pyramided by STAY
ing Off Old Debts; Now =
Scraping Bottom
SCHACT ADMITS PLIGHT
Initiation and War of Con-
quest Seen AS Only
Ways Out
By Special Correspondent


neutrality-suspicious. econ
omy will probably go through
1886 without a breakdown. It may
weather 1887, but all signs point
to a period, within two years, in
which initiation or military opera
tions will be the resort of a des-
perate administration whose reck-
less spending is driving it inverit-
ably towardes disaster.
Rumor says that an economist
recently interviewed the president
Of the German State Bank, DR..
Hjalmar Schacht.
"How much longer can you con-
tinue to borrow?" the interviewer
asked.
owe don't know" was the reply.
"Can you continue through the
present year?'
1--WE don't know. One thing we
are sure of: we shall keep on bor-.
rowing until we have secured
every mark we can get. Then we
shall decide what is to be done
next"
DEBT SCARS
EVERY MONTH
Perhaps this conversation really
took place. Perhaps it is merely
an categorical description of the
state bank operations. In either
case it gives a very clear picture
Of the German financial situation.
About 6O0,000,000 marks are being
added to the German public debt
each month. The figure is not ac-
curate as the government is very
reluctant to publish debt stats
tics. The debt increase has be-
come practically automatic; gov
eminent receipts are less than ex-
penditures. The difference is made
up by issuing employment GER
tificates."
A contractor who builds a pub
lie road is paid partly in cash, for
labor and materials; and partly in
the employment certificates, bear
ing about percent interest, which
he is expected to keep as a patri-
otto investment. The banks, in
surance companies and private
business houses are loaded with
the government paper, which is
flowing steadily from the printing
presses.
When a business house has
reached the limit and must have
ready cash, it can take the certi-
ficates to the state bank, and by
competent jockeying, turn in some
Of them for cash.
Since the state bank is already
overloaded with these certificates,
it will give cash relief only in the
most desperate cases. The conse-
quence is that German business is
like diver, fed by an air pipe. At !
most he can expect only a tiny
supply, and at any moment the
state bank, by pinching the pipe,
can strangle any business that
does not fall in line with these
orders.
SHORTAGE OF
RAW MATERIALS
This cash shortage is only one
OF many shortages under which |
German economy is laboring.
There is also a shortage of oil. |
Of cotton, of rubber. Of copper, of
mercury. All Of the important
raw materials are rationed. and
those most intimately connect
ed with the war industries are
frequently unobtainable. Th e |
shortage of fats, meal, eggs and
milk is another part of the same
picture.
Germany has been busiIy rearm-
ing for more than a year. and the |
drain Of this rearmament unOn |
cash resources and upon raw ma
terial supplies has been terrific.
German economy is today in the |
position of a spendthrift running |
thrugh an inherited estate. The |
cash is gone. MOrtatges have piIed |
up There are still a few pieces |
OF property upon which a LITTLE |