Evening star., 1953-07-26
Economic Miracle Revives Germany

Five years have gone by since the
allies great experiment in German
currency reform. In retrospect, it
can be stated without reservations
that the then controversial measure
turned out to be q complete success
at any rate In Western Germany.
In this comparatively short span
of time, the economic picture of
what in 1948 was '"Trizonia" and
now is the Federal Republic of Ger
many has changed beyond recogni-
ton. Instead of the practically
worthless Reichsmark of five years
ago, the Germans now have cur
rency Deutsche mark or DD rated
as the second strongest in Europe,
next to the Swiss franc.
Shortages to Surpluses
With a few exceptions-especially
housing-the dire shortages of 1948
have turned into surpluses, some of
which indeed tend to become en-
barrasSing. Rationing is but dim
memory and Western Germany'S
shop windows today are brimming
over with variety and quality of
goods superior to what one finds in
almost any other part of Europe.
The German farmers are doing
we'll and industry is operating in
high gear. After years of laborious
efforts to achieve reasonable bal
ance in foreign trade, Western Ger
many's exporters last year for the
first time piled up a sizable surplus.
AS the export drive gained momen-
tum, the central banks gold and
dollar holdings grew rapidly. In
the European Payments Union. Ger
many, not so long ago in debt up to
its ears, now ranks as the biggest
creditor nation.
It is an economic miracle and the
Germans themselves are still puZ-
zling just how it came about in such
overwhelmingly short time. Ger
tainly no one single person or factor
can take all the credit for it: rather.
the development was due to COM
bination of propitious circumstances.
coupled with the traditional indus
triousness and energy of the Ger
man people and generous aid from
the United States,
The Soft-PedoI Treatment
The Germans, while naturally
pleased with this amazing recovery
are inclined to soft-pedal their sue
ceSSes, lest the neighbors become
too enviouS (thiS is an old German
preoccupation. Foreign observers
they feel. have a tendency to see
only the rosy side of things and to
overlook the dark spots that remain
in the German economic picture.
Besides the most widely heard
complaint of a crushing tax burden,
German economists usually adduce
the following arguments in support
of their cautious view of the current
output and export boom:
l. There exists tremendous need
for industrial replacement and mod
ernization. since the vast majority of
plants are still running on their
equipment of Is years ago. This
is true, but corrective steps are now
being taken. Only a few weeks
ago, the Mutual Security Agency
announced the distribution of an
other $50 million marks to ex-
pand and modernize industrial ca
pacity in coal, electricity, gas, water,
steel and chemical plants. And in
the past five years total of 65 bill
lion marks have been invested in
industrial capacity, about 40 billion
OF it in new plants.
2. The principal reason why the
store windows are so full of goods
is that German people cannot afford
to buy them. This is, at best, a
half-truth. 1t is fact that a large
sector of the German population
especially the roughly 9 million ref
ugees from the EaSt-Still SubSistS
on incomes that allow only for ne
ceSSitieS. On the other hand, there
is in the making a new and rapidly
growing, middle class that is very
we'll Off
3. The brisk business done by
restaurants. bars, resorts and en-
tertainment places throughout Ger
many is principally accounted for
by foreign customers tourists and
occupation forceS). This is a very
questionable contention. Any one
who. like the writer. has had a re-
cent opportunity to observe condi-
tions at close quarters, in various
parts Of Germany, will agree that
the German clientele nowadays
vastly outnumbers the foreign ele-
ment almost everywhere. And not
only do more Germans dine out.
travel and relax than ever before.
but they also spend more freely.
4. While goods are plentiful,
money is tight and credit-eXcept
for essential purposes-virtually un-
obtainable. This. again. is a half
truth, which is well on its way to-
ward becoming an untruth. In
the first years after the currency
reform. money was indeed extremely
tight as the central bank applied a
severely restrictive credit policy.