The Washington times., 1938-07-23

the Czechs
PAUL MALLoN were going to
do about the Sudeten Germans.
That would not even be q good
excuse II it were true. It implies
that the totalitarian dictator.
ship cannot even protect its own
market against external for
eign policies. Herr Goering got
his foreign and domestic propa-
ganda mixed up again on that
one.
The real trouble runs deep
into the flimsy financial struc-
ture by which the wizard DR..
Schacht is trying to keep q bank
rupt nation going.
Here's how the best financial
authorities here see the widen.
ing Nazi crack:
THE BOURSE is not q bust.
L ness barometer, as is our
stock market or England's, be.
cause 1t is not free. The gov
ernment-made market is thin
and narrow compared with ours.
It does not dare to reflect in
ternal business conditions in
the way we understand stock
movements. only dangerous
major developments beyond the
control Of the government can
affect it.
The cave.in means, therefore,
Hitler tripped himself upon
some Of his efforts to defy
arithmetic. It is not difficult
for well advised experts here to
see which one threw him.
Big stumble-bloc was his new
method Of financing alma-
ments, public works and the
four.year plan to make Ger
many "self-sufficient." Up to
April this year his DR.. Schacht
had q scheme that worked like
magic. It was much better
than anything the bookkeepers
here have thought Of to keep
expenditures from showing up
in the public debt. Schacht
simply gave any company doing
work for the government a
work bill" or special bills" in
place Of cash. These bills are
10. us maturing In one and a
half to two years. The compa-
nies naturally could not wait
that long for their money, so
they took the bills to banks
where they got cash at a dis
count.
BILLS PILE UP
These bills began to pile up
in the Reichsbank so Schacht
refunded them at various times
in long term bonds. About the
end Of last year this refunding
got to be difficult. There were
too many bills to be refunded
even at the point Of a Nazi shot
gun.
So last March, Schacht an
nounced to the Reichsbank that
the government would cease this
hocus-pocus. Thereafter, Hitler
would finance himself honestly
by taxation and government
bond issues Gas the New Deal
does).
But the way it worked out, the
new treasury bills which he IS
sued were given to companies
the same as Of old. Only diff
ference was the companies could
not discount them, could not get
cash. Business was stuck with
non-negotiable vernm e n t
promises.
Companies got loaded with
this cold paper to the point
where they had to sell their own
stocks to raise cash to purchase
raw materials and operate their
business.
This liquidation caused the
cave-in.
ADDS TO BURDEN
TT SHOWS how the wind is
L blowing in Germany - and
it's a cold wind. It shows Hit
Ter cannot finance himself in
"a normal way" The Satura-
tion point has been reached on
taxes. The taxes and social
insurance contributions absorb
more than one-third Of the en-
tire German national income,
and yet cannot pay the freight
Of the Hitler dictatorship.
Schacht thought he could get
away with his return to normal
financing" because industrial
activity had increased his tax re-
ceipts. He might have for a
while had Hitler not moved into
Austria. That conquest added
the cost of Austrian rehabilita-
tion to the German financial
system.
X
POOR MUST PAY
A MOTHER THING: The self.
Asufficiency program is being
carried to expensive extremes.
Latest Nazi creation in this re-
Saent iS a nau hI1SinasS nallad