Evening star., 1948-12-04
Western Germany's Economic Ills


To the Editor of The Star
This week, ending with tomorrow's elec-
tions in Berlin, probably will bring the last
chapter in a story which already has lost a
great deal of its news value on q day-to-day
basis. Our attention will be shifting to West
ern Germany, where already most of our i'm
portant headquarters quietly have moved dur
ing the past few months. 1t might be Of in
terest for change to read an analysis Of the
a European observer on the spot the foreign
German situation as seen through the eyes OF
correspondent of one of the leading Danish
newspapers. This account supplies many in
teresting sidelights, which have failed to
detect in our own newspaper reports from
Germany:
Western Germany has experienced tre-
mendous improvements since the introduction
OF the currency reform-lving standards have
gone up for those who can afford 1t, food sup
plies have improved except for meat, vegetables
and potatoes are unrationed, production in gen.
eral has gone up. steel production has doubled,
coal production has gone up 90 per cent and
shops are full of luxury goods and even some
household goods. The reasons for this i'm
provement, aside from the currency reform, are
ERP, a good harvest, better labor efficiency
and the blockade
All OF UneSe QeVelOpIneIltS, however, nave
prompted M G. spokesmen to paint an over
optimistic picture of the German economic sit
uation. Even Gen. Clay's statement on his
recent trip to the States, as quoted in over
seas editions, that steel production Is now T.
100000 tons year, does not entirely bear out
the facts. This figure would be correct If the
October rate of $4,000 tons is kept up for IL
months, which is not likely to happen. Pro-
duction during the first six months of l94S was
quite good and it is expected to come to a
high before Christmas, when the workers need
more money. The total estimate for 1948. how
ever, is only 5,5O0,00O tons. while production is
sure to fall rather sharply during the first part
OF 1949.
Labor efficiency, which was another reason
for good production, is getting setback due
to the present gap between prices and wages,
discouraging the workers
THE German Economic Administration does
not cope eficiently with its problems The
Frankfurt administration removed price con-
trolls and the gap between prices and wages is
getting bigger and bigger. Prices constantly
are rising and are now far beyond the general
public's reach. Industry and business had
boarded considerable stocks and the currency
reform left them largely untouched. Right after
Ile CuIIeuCy IclOlHl LLc LOdIucu otOShS "clc
sold at reasonable prices because industry
needed cash. Some of the money was put into
reconstruction of their business, but there was
plenty of money left which made business and
industry put up prices in order to limit sales.
Their reason is fear of the second phase of the
currency reform the capital adjustment LAS
tenausgleich. AS result dangerous situa-
alton is developing, business and industry are
holding back stocks while buying wildly, and
goods are unobtainabe for the public because
prices are prohbtive. Business invests all its
surplus money in goods and goes to the banks
for credits, which the banks foolish enough
to grant them.
IF the new German government to be in
stalled in March is not composed of extraor-
dinary personalities with extraordinary energy
and courage with extraordinary powers and all
thority, there are great chances that the halt-
heartedness of the present Vschy frankfurt
Economic Administration shall be carried@on
by government which pretends to be sovereign
without the authority and responsibility OF
sovereignty. viii such personalities be found'
II not, the situation might well get out of hand
and become dangerouS."%
URSULA CROWLEY.