Evening star., 1938-12-06

was good, her anti-capitalistic pro-
gram was not yet understood abroad
and the Balkan countries little sus-
pected that the Nazis were boldly
embarked upon fraud.
The Germans exploited the sys-
tenn Of exchange clearing agree
ments. This system had been estab-
lished to facilitate the barter of
goods after the collapse of the gold
standard. A Hungarian concern
needed German machinery, but had
no foreign exchange with which to
buy marks.
A German concern needed wheat,
but had no foreign exchange with
which to buy pengoes. The prob
lem was solved by the clearings
agreement. The Germans shipped
machinery and applied to their own
government for payment in marks.
The Hungarian shipped wheat and
applied to his own government for
payment in pengoes. The two gov
ernments Cancelled of the exchange
by a bookkeeping transaction in
which no foreign currency was
passed. Obviously this stratagem
which operated all over Europe was
workable only so long as trade be-
tween Germany and Hungary was
balanced.
The Germans deliberately ex-
plotted and perverted the exchange
clearing agreements. They bought
right and left. They took every
kind OF produce which could be
bought in the Danubian and Balkan
countries-many things which they
did not need-and they made little
effort to push their own sales. The
result, Of course, was only seen later
IN serious disequilibrium as Ger
many piled up huge Indebtedness
IN each Of these countries.
Statistics Show Achievement.
How far the Germans carried this
practice can be seen from statistics
OF frozen claims against Germany
BY the middle of 1896 Hungary's
frozen claims against Germany to-
tailed 25,000, 900 marks, Bulgaria's
10000 900 marks. Rumania's 18,000,-
600 marks, Yugoslavias 21,0O0 900
marks and Greece's 10000, 900 marks.
Not only were the little countries
duped. Even In the United States
Cordell Hull worked out a trade
policy designed to end exchange
clearing and relieve the problem Of
frozen credits. Neither Mr.. Hull
nor the Balkan statesmen could be-
lieve that Germany deliberately and
fraudulently contracted these debts;
neither could understand that Ger
man trade policy was one not Of
desperation but of cunning, designed
for vaster aims than trade.
For the immediate sufferer in each
case was not the concern which
shipped goods to Germany, but the
government which had to pay the
company. Accordingly, while one
Balkan government after another
strained its resources to compensate
one concern after another, and, un-
derstand1ng too late the real mean
ing Of trade with Germany, sought
desperately to apply the brakes, Bal
kan businessmen and peasants be-
came the champions Of Germany.
Was It not Germany who bought
their goods?
And so Danubian and Balkan
governments, afraid Of the conse-
quences of further trade with Ger
many, faced two things which made
1t almost impossible to shut down
on this dangerous trend A shut
down risked Cd violent political
opposition from companies and in
dividuals who had been selling to
Germany and co the reputation
by Germany Of her obligations, with
no chance of collecting frozen
credits.
Bought for Resale.
simultaneously the Germans
playing tricks with the mark which
has two-score valuations-bought
from Danubian and Balkan coun-
tries for resale abroad. Germany
has sold for gold wheat from Hun
gary and Rumania, tobacco from
Greece, raisins from Turkey and the
like. Aided by government subsi-
dies, German companies could sell
at a heavy loss in order to get gold
and foreign exchange. This not
only built up a hidden gold reserve
for rearmament, but it also spoiled
world markets for Danubian and
Balkan countries and further vas
salized them.
The Germans have already car
ried this trick to the American hem
isphere, bartering machinery against
Colombian coffee, only to resell It
for gold In Denmark. where the
Colombians found no further mar
ket.
How Germany plays both ends
against the middle to make these
countries entirely dependent upon
Berlin is well illustrated by DR.. Paul
Einz1g's anecdote. Berlin persuaded
q Greek firm to exchange its to-
bacco surplus for several hundred
thousand German mouth organs.
The Greek firm was persuaded on
the argument that the American
market would take the mouth Or
gans. Trying to sell in America,
the unhappy Greeks found that
Germany had already saturated the
American market.
Carried Policy Further.
Having trapped these countries
economically, Germany then car
ried its policy further toward the
political goal by selling German
ornaments and by extending long
term credits. Turkey was aston
ished when it began to remilitarize
the Dardanelles to find that Krupp's
bid was below cost. The late die
tator Ataturk took the much more
costly British bid, even though the
Krupp work was not only below
cost, but could have been charged
of against German frozen credits
in Turkey. Ataturk wanted to be
independent Of Germany then. It