Evening star., 1936-07-12
BY CONSTANTINE BROWN.

MEXICAN foreign traQe DeglrS
~ to feel the results of the ag
~ gressive policy of Japan and
4 Germany And while Europe
and Asia are alarmed at the military
expansion of these two nations, Ameri-
can exporters look helplessly at the
further shrinkage of their foreign mar
kets.
The methods Of Japan and Of Ger
many for the conquest of the world
market differ. Germany uses per-
suasion: Japan uses force. But while
the methods differ, the result. for the
American exporter. is the same.
DR.. Schacht, the president Of the
Relchsbank. has just completed sue
cessful trip to the Balkans. The pre-
text of his pilgrimage to Belgrade,
Sofia and Athens was to pay his re-
spects to the presidents of the banks
of issue in those countries. The real
reason. however, was the establish
ment OF economic agreements which
will make the three states the eco
omic dependencies of the Reich.
The foundations for such agreements
we're laid last year by Gen. Hermann
Goering and Minister Won Papen.
They. too. visited Yugoslavia, Greece
and Bulgaria and pointed out to the
respective governments the advantage
they would gain from closer cooper
alton with Germany They sowed the
seeds and Herr Schacht reaped the
harvest. 1t took some time before the
seeds could mature. Italy's successful
campaign in Ethiopia, Germany's re-
occupation of the Rhineland, the
weakness Of France, the collapse of
the League of Nations and it's avowed
impotence to defend smaller countries,
all helped the Reich to obtain a domi-
mating position in these three Balkan
states.
Used in South America.
The method used by the Reich econ
omists to acquire this unique situation
for Germany, not only in the Danubian
Valley, but also in South America. is
simple. 1t is the result of the lack of
foreign exchange and credits from
which the Reich has been suffering
during the last three years. Since
1888 Germany has been building un-
favorable trade balances. In order to
keep her factories working, she offered
prices higher than the world market.
on condition that the nations which
sold her raw materials agreed to ac-
cept payment in kind
Thus, last year, for the first time
in the history of the Reich, Herr Hit
ler's agents purchased cotton in Brazil
after their offer to buy 100000 bales
of cotton on credit from the American
cotton growers was turned down in
Washington. Brazil, however, has
sold most of her cotton crop to Great
Britain. She had to repurchase 1t at
higher price, and then sell it to the
Reich. But even after liquidating this
costly deal, the Brazilian government
made substantial profit-on paper.
Germany paid with credits-blocked
marks. And Brazil bought from the
Reich the finished products she would
have purchased in the United States
or in Great Britain. The same thing
applies to coffee and other raw ma
terials of which Brazil has an over
production. And from Brazil, the
Reich is spreading to other countries
in the South American continent.
These countries have difficulties in
finding cash markets for their prod
ucts. They must choose between al
lowing their coffee and cotton to rot.
their cattle to grow wild and their
mines to remain idle, or to sell to
country which Is willing to absorb
them but pay In blocked credit. And
they have chosen the latter. The