Evening star., 1938-12-25
BY De Wit Mackenzie,
Associated Press Foreign Correspondent

had everybody bewildered. Walther
Funk, German minister of economics,
was headed for Turkey like prairie fire
while the Sudeten Germans were hold
ing their first celebrations over their
union with the Reich.
When hit Belgrade. on October 25,
Germany and Yugoslavia were putting
their names to a new economic treaty,
and there we're SO many Nazi officials
and businessmen in the capital that the
two leading hotels were jammed. A few
days later Bulgarian officials were much
excited when I told them about the
Yugoslav-German pact; they hadn't
+ heard about it yet. ..
The upshot Of all this was that the
Balkans lined up held their own noses
and dutifully took their bitter medicine
One uses the term bitter" advisedly, for
I was told mournfully in every capital
that at least some degree of political
control most assuredly would accompany
the undisputed economic domination.
The danger of political control lies in
this:
These countries are dependent on Ger
many to absorb large portion of their
surplus products, mainly agricultural
German imports from the different
states vary. but we are close enough if
we say they run from about 40 per cent
to more than so.
Holds Economic Fate.
AS distinguished public man put it
to me regarding his own country zone
of the Danubian group:
More than so per cent of our exports
60 to Germany and we have no alterna-
tive market. All Germany has to do is
stop our imports into the Reich for six
months and we are bankrupt"
got similar expression everywhere
I went.
The economic scheme which Germany
has imposed is as astonishing as is the
overnight creation of the empire itself
1t is nothing more nor less than trade
exclusively on the barter system.
Scarcely one copper penny does Ger
many pay in cash, and she has her new
empire busy skin1ming all the cream off
the milk and shipping it to her.
Here enters the famous blocked
mark which has caused so much an
guish to international traders. German
dealers may not pay for foreign goods
in marks without special permit from
| the government. That is to say, money
may not be taken or sent out of the
country without permission.
CO
| let's say wheat from Hungary-she pays
| for it in credit which is available only
| in Germany. In other words, Hungary
| can't get cash, but has to take her pay
| in German goods. Hungary, of course
| wants ready money for her own needs,
but being dependent on Germany to
absorb exports, she has to accept credit.
Scheme Captures Farmer.
| Along with this Germany works an
other very clever plan. She insures a
| high rate for the mark in making her
purchases. This naturally pleases the
Balkan farmer no end and makes him
firm supporter of the scheme. His
home government-and not the Reich
meantime is in the uncomfortable posi-
ton of having to finance him until such
time as German goods can be imported
and sold to pay for his products.
| While the units of the economic en-
| pire are deprived of the opportunity of
securing much needed cash for their
, products, this is far from the case with
| Germany, which makes these countries
indirectly provide it with ready money
She does this by the simple expedient of
| importing far more than she needs for
home consumption. and then exporting
the surplus to countries which will pay
! cash.
In this manner the Reich keeps silver
in the well-worn purse, and at the same
time makes Central Europe and the Bal
kans even more dependent by taking
outside markets away from them.
There may be another rub when the
countries of the economic empire come
to take up their credits in Berlin.
Frequently they can't get goods they
want and have to accept other products
If they decline the substitutes and let
1 IL - l. u IL