Evening star., 1941-04-27

pattern tOr europe ana South
America. -Harris-EWing Photo.
works A year later came the rearma-
ment program which, according to
Hitler's statement, represented an in
vestment of over $22 600 100000 at the
outset of the war The consequence of
this great employment was an increase
of national income from $500, 1000 900
reichsmarks in 1888 to 59,1O5 100000 in
1899. Money ran from hand-to-hand
with a velocity which made unnecessary
added volume so that circulation of
5,722 900 900 reichsmarks in 1888 was
augmented only to 7,774 100000 reichs-
marks in 1887. There is, however,
striking increase and an evidence of
war initiation by December 81, 1899, in the
circulation figures of 14,502 100000
Credits Were Frozen.
Under the Schacht system, all went
well enough as far as the internal aspect
of the currency was concerned but, in
foreign trade, restraints on purchasing
power and prices meant nothing. Be-
yond the borders of Germany, the
reichsmark had no purchasing power and
very tenuous credit or exchange value.
Therefore Swiss creditors decided to
freeze a credit in the Central Bank at
Zurich against German debtors. This
was the origin of blocked credits, con-
trolled currency and foreign bilateral-
barter-trade agreements France, Great
Britain, Belgium, Norway and Sweden
Immediately followed the example of
Switzerland, and foreign exchange deal
ing with Germany became thing of the
past Denied any other means of pay"
ments in foreign trade Germany was
forced to balance exports against imports.
The Rumanian bilateral trading agree
ment, concluded in March, 1889, and de-
scribed by its author as the economic
clinic for a sick continent" is typical of
Germany's balancing agreements to meet
its deficiency in foreign exchange. This
provides for an exchange of German
manufactured goods for Rumanian raw
materials, i. e., the same business ar
rangement which once made the Reich
the greatest industrial nation of Europe.
Similar agreements have been made
with Hungary and Bulgaria which,
according to German planners inter-
viewed. assure Germany adequate food
supplies for an indefinite time. The
Danubian Valley is the granary of Eu-
rope, they say, and the natural compile
ment of Germanys industrial economy.
Reich's Wide Orbit.
Bilateral trading agreements also have
been negotiated and are in operation
with Spain, Switzerland, Italy and Rus
sia With Sweden under German con-
troll and with Norway, Belgium, industrial
France, Denmark, Czecho-S -Slovakia and
Poland occupied by German military
forces, the realities are that there is
little space in Europe which is not within
the gross raum or economic orbit, of the
Third Reich.
The author of the agreement with
Russia gave me solemn assurance that
deliveries of pig iron wheat, phosphate,
oil and manganese had been entirely
satisfactory and in accordance with the
terms of the contract, despite difficulties
in making transfers from Russian
freight cars to Polish narrow gauge
tracks. I got a shock when I thought
of our South and the 100000 bales of
cotton which, he assured me, had been
brought during the last year from Russia
to German textile mills
Under the influence of these bilateral
trading agreements, the foreign COM
merce of Germany in Europe has grown
so fast that 1t is now equal in volume
to what it was before this war, despite
the complete loss of British, North Amer
lean and South American markets,
was told
Beyond Europe was told by Reich
| experts, South America is another nat
ural complement for the expansion of
industrialized Germany in the field of
foreign trade. Far more than Africa
for it will be many years before the prim-
tive people of Africa can develop a
demand for the output of German in
dustry-Scuth America has growing
need for the chemicals. electro-technical
machinery, glass, porcelain, ETC., which
Germany can turn out so we'll.
AS these demands Of the South Ameri-
can continent expand under the influ-
ence of the modern economic era, Ger
man engineers with German equipment
will dig tunnels, level hills and lay out
roads and routes Of transport, while
German machinery will be installed in
South Americas growing industrial
plant.
Does this mean expulsion of American
trade in South America? The German
experts I interviewed insisted that it
did not. They said that American
articles now sold in South American
markets were the typical output of
American mass production in which the
United States has an unusual suprem-
acy-passenger automobiles, trucks,
electrical refrigerators, radios and busi-