Germany Totters on Verge of Inflation

(This is the fourth article in the series by this correspondent, who has recently returned from a special investigatory tour of Germany for the Jewish Telegraphic Agency.)

Dr. Max Naumann is a prosperous Jewish lawyer in Berlin. Wounded four or five times during the World War, decorated with the Iron Cross, First Class and Second Class, and patriotic beyond reason to the German government (right or wrong), he has been allowed to retain his court offices, his property, and his health. He is head of the Union of National German Jews, an organization of 7,000 members.

Dr. Naumann writes for English and German language publications abroad. He does his utmost to belie anti-Nazi propaganda. He is the one Jew I met in Germany who would be quoted on political conditions there, although he demanded that he be shown the article before I released it to the press.

“Tell the Jews abroad, I beg of you, not to boycott German goods,” Dr. Naumann one day pleaded in his offices in Franzoischstrasse. “Tell them that the Jews in Germany are not so badly off as press reports would indicate. Tell them that boycott would only intensify Nazi feeling against the Jews here. The Jews here do not want foreign boycott. We won’t have it !”

LOST NOTHING YET

I don’t know whether Dr. Naumann was speaking for himself or for his organization. There is no reason why Dr. Naumann should not support the Nazis. As yet, he is one of the very few Jews in Germany who has lost nothing by their rise to power. It is certain, however, that he was not speaking for at least ninety percent of the other Jews in Germany or for any of the Jews outside that country.

Not that other German Jews are not every bit as patriotic toward the fatherland as is Dr. Naumann. They are fond of the country and of the people. They have become Germanized to a great extent and are part of the soil. But to pay tribute to a governmental clique aiming at their destruction is quite another matter.

If the boycott of Germany were undertaken only as retaliation against the German people for their action against the Jews, the writer ###uld most ardently oppose it. The people who will suffer are for the ###st part those millions who have ###n robbed of all freedom of ex###ssion and action. Germany under ###er has become a country of ###r creatures who can not do ###rwise than obey the commands ###heir fanatical leaders. Unless a ###cott were exceedingly effective, ### workers, the Jews, and people ### in sympathy with Hitler would ### hard hit, while the Nazis, now in ### position to take from Germany ###at they want, would survive and ###nrive with the rest of the country ### industrially and economically deso### late.

There is, however, an infinitely more important reason for the boycott of Germany. It goes deeper than purposeless revenge, deeper than restoration of their rights to the Jews. The boycott should be used as a defensive weapon to thwart the Nazi attempt to exterminate Jews throughout the world.

In a previous article I have given what I consider ample proof of the existence of a Nazi Internationale. Nazi officials have told me the principles of this organization, requested me to write or rewrite anti-Semitic propaganda as part of it. We need only look into the operations of German communities in the larger cities of the world to find traces of it.

Jews of the world are faced with the choice of either striking immediately at Nazi Germany or resigning themselves to the effect of this Nazi Internationale, which promises to be more powerful than the Communist international organization ever has been. With the economic structure of Germany tottering, with the benefits of National Socialism in Germany still unproven, with opposition elements in Germany exceedingly quiet but, nevertheless, still existent, the present moment offers a rare opportunity to strike at Nazi Germany and nip world anti-Semitism in the bud.

The history of international boycott indicates that boycotts usually die a natural death with the “petering out” of committees’ energies and the flagging spirit of cooperative elements. Hence, in planning an anti-Nazi boycott more reliance should be placed on a sudden decisive thrust than in a long-drawn-out movement.

GERMANY FACES A CRISIS

Germany is destined to face an economic crisis at the height of the coming winter. Workers employed by the state re-employment departments in arbeitdienstlagen (workers’ camps) will not be able to pursue their occupations at developing roads, draining land, and, generally, working in the open. Farmers will be idle and their helpers laid off. Tobogganing with the normal winter slump in hundreds of seasonal occupations, the present downward trend of German exports will bring joblessness to thousands of persons now employed as factory hands and transportation workers.

To retain the support of their subjects the Nazi Government apparently considers the creation of an illusion of prosperity more important than food, housing, and other more palpable evidences of national recovery. Nazis are giving the people “rounded the corner” headlines in all German newspapers rather than the promised “arbeit und brot.” If the German people ever awaken to the true facts of the situation (and they may when cold December winds blow) there will be a hot time in Berlin.

In an effort to stem the tide of unemployment the Nazi Government is attempting to raise money for the creation of jobs during the winter. But, in the meantime, Hitler is ballyhooing every actual spurt and advertising many other phases of “recovery” which will not stand analysis.

AMONG THE ‘RE-EMPLOYED’

Widely advertised is the Nazi assertion that since January 31 the number of employed in Germany has risen from 11,487,000 to approximately 13,500,000. The Nazi press carelessly neglects to explain that these figures are taken principally from dole statistics. When a man goes off the dole, he is considered one of the newly employed. Many Jews and anti-Nazis have gone off the dole and are still jobless, yet their names are added to the “reemployed.”

Almost 300,000 of the “re-employed” have been put to work in state labor camps on salaries of less than $3 per month. In glaring headlines the German press has been announcing that Koenigsberg and other districts are “free from unemployment !” This is ever so in these areas at harvest.

To impress the German people with the good work of the new government and the development of Germany’s commerce, the German Statistical Office has announced that exports have increased in August seven percent over those of July and substantially, in both imports and exports, over those of the previous August.

What the statistical office did not tell the German people was that of eight great powers Germany’s exports decreased in August 16.1 percent below those of last year, that the loss is even greater considering the concessions being made by the government through cheap block marks and depreciated dollar bonds purchased abroad, that much of the export goods were sent out by Jews and “Marxists” intending to leave Germany who ordered that payment should be made to banks abroad, that the August record contains an accumulation of previous exports to Russia (which alone would bring the alleged export gain down to five percent), or that shipping has shown a decided decline over last year’s figures (about 30 percent less passengers have travelled on German ships this year.)

What will the German people think of this Nazi deception, when they become aware of it? Airtight as is the Nazi dictatorship it seems improbable that all the people can be fooled all the time.

WHAT GERMANY FACES

Striving to sell its goods abroad to meet the requirements of 9,000,000 Germans dependent for livelihood upon the export trade (which constitutes 35 percent of the nation’s industry) the Nazi government is artificially lowering prices through block marks to overcome Japan’s competition in the world market, the impoverishment of South American buyers, the depreciation of the dollar, the nationalization of European countries, and the repugnance of powers repelled by the Nazi treatment of Jews.

In lowering her prices Germany must be exceedingly careful to keep inflation from raising its ugly head. With German money in circulation supported to only 11 percent of its value by gold and foreign money (about one-third of the amount generally considered ample security) inflation would be utterly disastrous. Once started on its downward path the Reichsmark would not stop until it had reached its 1922 level.

Lack of confidence in the Reichsmark was reflected in a recent experience of the writer. Three New York banks refused to change marks into dollars. “It’s too risky,” one cashier explained. “We might wake up tomorrow and find these Reichsmark bills not worth the paper they are printed on.”

Economic experts in Berlin tell me that better informed Germans in increasing numbers are asking information about inflation-proof investments.

Despite additional taxation being imposed by the Nazi government tax receipts continue to be far too low for Hitler to finance his ambitions public works program. Thousands of Germans are giving up their homes to rent apartments or houses, because property taxes are too high. An engineer in Berlin recently told me that of his 635 marks monthly salary, he is forced to pay 195 marks to the government in taxes.

GRAB OPPONENTS’ FUNDS

To increase his party and government finances Herr Hitler has appropriated the funds of all opposition parties. Even the disbanded boy scout organization turned its chests over to the Hitler Youth movement. Many Jews, Socialists and Communists have been forced into bankruptcy and their properties taken over by the Nazis. Despite the fact that they are barred from courts and hospitals, Jewish lawyers and doctors are forced to pay exorbitant professional taxes.

National lotteries have been instituted. “Spendes” (begging solicitations) have been instituted and carried out by burly brownshirts, who frequently coerce Germans, especially Jews, into dropping coins into their tin containers for unemployment funds, monuments for Nazis, and various other “causes.”

Despite all these measures government receipts are entirely too low to meet Nazi expenditures. On June first one billion marks were borrowed from the Reichsbank. Finance Minister Luther did not approve of this loan on the grounds that it would weaken the bank and bring the country nearer to inflation. He was ousted and Dr. Schacht put in his office. From well informed sources it is learned that Schacht too is appalled at the economic situation of the country and discourages any further borrowing from the Reichsbank. Feder is more liberal and may succeed Dr. Schacht.

FORCED LOANS APPROACHING

With receipts from “spendes” and lotteries diminishing, the only solution to the Nazi economic problem appears to be compulsory internal loans, which are being discussed quite seriously. If these fail to take care of Nazi financial objects there will be no alternative but inflation.

Many disgruntled elements continue to live in Germany, but they are forced to hide their discontent. With the rise of Hitler a certainty before the last election, the 53 percent of the voters who voted against the Nazi Party, it is logical to suppose, were quite decidedly anti-Nazi. In view of Hitler’s failure to carry out any but the non-profitable racial clauses of his program, it is difficult to believe that many anti-Nazi factors at election time have changed their sentiments. In fact, one might be compelled to believe that Hitler’s showing has lost him much support.

With a strong boycott intensifying the personal hardship of Germans during the coming winter crisis—intensifying it to such extent that even blind Germany must see beyond the prosperity headlines of the Nazi press—there is a strong possibility of a leader rising from the discontented masses to lead the people in a fight for freedom and better conditions.

THE HITLERIAN CRISES

With government and Nazi Party funds bewilderingly confused, with joblessness and want a certainty during the coming winter, with Germany’s banks and especially the Reichsbank too terrified to reject Nazi demands for money, with the Berlin boerse on the verge of collapse because of the reluctance of banks to support stock and bond issues, with millions of dollars being spent on uniforms, parades, and propaganda while many Germans go hungry, with the trade and debt future of Germany exceedingly bleak—even with all these factors tending to facilitate the overthrow of the Nazi government, it will still be a great task to oust Hitler from power.

Adolf Hitler, intuitively one of the keenest politicians Europe has seen in generations, is consolidating his position in no haphazard manner. Today he has almost succeeded in securing such a balance of power among the various elements of the Third Reich that rebellion by any faction would be checkmated promptly.

In Germany it is well known that with Nazi power assured the first opposition units to turn brown were the Reds. With Hitler’s announcement a few weeks ago that “the Revolution Is Over,” Communists in many parts of Germany took stock of their position. Their inventory revealed that Hitler and his immediate henchmen had bettered their position with jobs and power. But lowlier followers, who had made possible the success of the revolt, were still jobless with no tangible proof of the benefits of the Nazi revolt other than the acquiescence of the people and business. They were still without work and food.

HEINES BEATS DISSENTERS

Late in July there was heard a general grumbling throughout the Nazi party in Germany. It was made most manifest in Breslau, where Herr Edmund Heines, the massive, smiling Fehme murderer, is police president and head of the Nazi organization. With his two great hands Herr Heines thrashed dissenters behind locked doors and promptly discouraged discontent among his followers. Similar actions were taken in other parts of Germany. Many Communists were forced to discard their stormtroop brown for concentration camp gray. Since then grumbling is done in sotto voice.

There has developed, among the leaders of the Nazi Party a right and a left wing. Hitler, now faced with the responsibility of maintaining Germany’s foreign relations and improving the industrial and social conditions of the country, has shown tendencies characteristic of all revolutionary dictators in swinging to conservative policies. Less responsible and more maniacal leaders under him, however, are forcing the chancellor to hold to his drastic policies; and it is highly unlikely that the Fuhrer will be able to let down on his expressed militant and racial aims.

HE RULES BY DIVIDING

To insure himself of supreme power, the cagey Hitler has made distinct groups of his youth, his stormtroops, his civil service, his church bodies, his police, his national army, the Junkers (landed nobility), his labor front, and his staff of industrial barons. With dissension from any one of these groups the balance could immediately be brought into play for the supreme leader, under whose direct control they operate.

Hitler’s persistence in pressing the Vatican for a new concordat which is more liberal by far than previous treaties and more generous than Hitler normally would care to grant, is regarded as a move on the part of the chancellor to secure the support of Germany’s Roman Catholics, who have acted in years past as a large well-coordinated political bloc.

While Hitler’s maneuvers in dividing the various forces of his country may be regarded as a move to strengthen his own position at the head of German affairs, it is also an expression of uneasiness.